Running a business these days can be very difficult. A tough economy can lead many business owners to begin missing payments on debts owed to creditors. It does not take much to begin falling behind with creditors and having the creditors begin harassing you for payment. Mounting debt can lead business owners to be forced to make difficult choices. One available choice for a business owner to get out of debt is to file for bankruptcy.
Bankruptcy allows the business owner to stop creditor actions such as foreclosure and repossession. In Chapter 7 bankruptcy proceedings, the debtor can liquidate their assets to pay debts, and the remaining eligible debts are discharged.
A Wisconsin dairy company has filed for Chapter 7 bankruptcy protection in Delaware. The company, Golden Guernsey Dairy, closed in January of this year. At least one creditor supports the sale of the company to another dairy company in order to satisfy the company's debts. The creditor, Accord Financial, supports the decision as long as its secured debt of $7.9 million can be paid from the proceeds.
An Ohio dairy company, Superior Dairy, has offered to buy the closed plant for $5.5 million. However, its offer does not include the labor contract that was in place. The bankruptcy trustees are accepting offers for the company through May 10.
Chapter 7 bankruptcy allows individuals who qualify to eliminate their debts. To determine whether or not an individual or business qualifies, the bankruptcy court will compare the debtor's income to debts in order to determine whether the debtor can afford to continue making payments to creditors.
Source: The Sacramento Bee, "Creditor support sale of Golden Guernsey Dairy," March 15, 2013