Many people in Kentucky have used the services of 21st Century Oncology, a large cancer treatment network concentrated in southeastern states. Following years of declining revenue and the settlement of several lawsuits, the company recently filed a petition for bankruptcy under Chapter 11.
Many factors can force a person or business into bankruptcy. A recent Chapter 7 filing involving a Kentucky-based food manufacturer highlights this fact and provides a devastating irony: the seller of a peanut-free peanut butter called "I. M. Healthy" has been forced to file a business bankruptcy under Chapter 7 because its product has been found to be contaminated with the bacillus E. coli
Many Kentucky businesses that file a petition for bankruptcy are often party to one or more contracts under which the parties have not fulfilled all of their obligations. A common example is a commercial lease whose term has not expired. In such a situation, the debtor must continue to pay rent, and the landlord must continue to allow the debtor to occupy the space. What happens to these contracts in a business bankruptcy proceeding?
Two popular Louisville area restaurants may be forced to close their doors if, as has been whispered, their parent corporation decides to declare bankruptcy. The irony of the situation is the fact that both local restaurants appear to be doing well financially.
Bankruptcy can become a significant stigma for small businesses in Kentucky and their owners. Bankruptcy is often viewed as the "nuclear option" to be used only after other attempts at keeping a business solvent have failed. However, even businesses that are deeply in debt may be able to avoid bankruptcy by negotiating agreements to restructure their debts instead of filing a bankruptcy petition.
Most Kentucky business that are contemplating bankruptcy assume that filing the petition will invoke an automatic stay and protect them from pending lawsuits. In a case that may have implications for business bankruptcies in Kentucky and across the country, the United States Supreme Court declined to review a decision of the Second Circuit Court of Appeals that held that General Motors was not protected from product liability suits because it withheld critical information from the bankruptcy court.
As many Kentucky business owners know, a Chapter 11 bankruptcy, in which the debtor seeks to reorganize its debt structure while it continues to operate, can take many forms, depending upon the business of the debtor and the extent and nature of its financial obligations. A recently announced bankruptcy filing by a medical device manufacturer shows how even a Chapter 11 bankruptcy may result in the sale of most, if not all, of the debtor's property.
Many Kentuckians who are contemplating bankruptcy under either Chapter 11 or Chapter 13 may believe that when the court enters an order approving the plan of reorganization, the proceeding is over. This belief, however comforting it may be, is not correct. A recent motion by the trustee in a bankruptcy case in Kansas shows how a bankruptcy case can be reopened if fraud is suspected.
Many Kentucky business owners who are facing mounting business debts are aware that the federal Bankruptcy Act provides them a haven in which their debt can be reorganized, thereby giving the business a fresh start. This post will provide an overview of one of the most important parts of a Chapter 11 bankruptcy: the plan of reorganization.
Changing retail habits of Kentuckians and residents of nearby states appear to have claimed another victim: retail chain HHGregg. Gregg has been hoping to reorganize its debts under Chapter 11 of the Bankruptcy Code, but it is now facing the possibility that it will not find a buyer and that it will be forced to liquidate its business.