When a business has serious financial problems
and is unable to service its debt it may file for
(or be forced to file by creditors) chapter 7
bankruptcy for business. Chapter 7 is used to
liquidate a business by liquidating its assets and
distributing the proceeds to its creditors to
satisfy the debts.
After the bankruptcy the business ceases operations
and the owners owe nothing further to the creditors.
However, if the business is a corporation remaining
debts after liquidation are not discharged but remain
as obligations as long as the corporation exists.
Employees of a business will generally lose their
jobs unless the business has entire division(s) that
were sold to other businesses during the liquidation
process.
Secured creditors such as bondholders or banks with
secured assets have a priority claim to liquidated
proceeds over unsecured creditors such as vendors and
suppliers.
Chapter 7
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• Websters, In Business Since 1948, Files For Bankruptcy Cape Gazette
Webster Furniture in Rehoboth Beach, a popular local business since 1948, has closed its doors and filed for Chapter 7 bankruptcy protection.
• Reuters Canada Business Summary The Globe And Mail
NEW YORK Reuters A unit of Canadian forestry firm Tembec Inc filed for Chapter 15 bankruptcy protection in New York on Thursday as a procedural step to implement a debt restructuring already approved in Canada.
• Bankruptcy Basics Forbes
The short book on Chapter 7.
• S. Florida Bankruptcy Filings Up From A Year Ago Miami Herald
The number of South Floridians filing for bankruptcy rose almost 60 percent in August from a year ago, but fell about 7.5 percent from July.
• Shells Restaurants File For Bankruptcy Florida Today
It looks like the slow economy is taking a bite out of another restaurant chain. Shells Seafood Restaurants, Inc., with a location at 1490 W. New Haven Ave. in Melbourne, filed for Chapter 11 bankruptcy protection Tuesday in U.S. Bankruptcy Court for the Middle District of Florida in Tampa.
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