Business Bankruptcy Raises Questions of Partnership
Businesses throughout New York open their doors for the first time each day. For some, selling their goods and services within their communities is easy to do. Others struggle to keep their doors open after the excitement of starting up wanes. Many businesses attempt to preserve their existences through bankruptcy and other financial opportunities when their only other option is to close.
A night club chain with businesses in New York is involved in an unusual bankruptcy situation. The Pink Elephant Licensing Corporation is the entity responsible for granting franchise rights to parties hopeful to open Pink Elephant lounges. A Greenwich Village business owner acquired just such a license to open a Pink Elephant business from the corporation but recently was forced to file for bankruptcy.
The owner of the struggling business claims that the two principals of the Pink Elephant Licensing Corporation are partners in the failing franchise. However, the men associated with the corporation deny any ownership or partnership involvement in the Greenwich Village site. For his part, the owner claims that he has evidence of the others’ partnership with him.
Business bankruptcy can be a complete reorganization of a company that requires the participation of all invested parties. If the two corporation principals are actually owners in the failing Pink Elephant site, then they may be forced to be part of the ongoing bankruptcy case. A court will thus have to decide whether they are responsible for the financial health of the Greenwich Village nightclub.
Bankruptcy, whether on a personal or business level, is an opportunity to preserve some assets while seeking to eliminate debt or reorganize debt so that payments are more manageable. As evidenced by this story, there are many pieces that must line up for a bankruptcy petition to be correct. Bankruptcy lawyers have training that allows them to aid their clients and ensure that the cases are filed properly under the law. Therefore, if an individual is struggling financially, he or she may wish to speak with an experienced attorney about his or her legal options to find the second chance we all deserve.
Source: Crain’s New York Business, “Nightclub bankruptcy unearths partner dispute,” Lisa Fickenscher, July 22, 2014