This blog has frequently considered the power given to companies who have filed a Chapter 11 bankruptcy petition to revoke real estate leases that still have many months left on the original term. Now a New York City landlord is attempting to reverse the process by using this provision of the code in an attempt to evict tenants from a rent-controlled apartment building to facilitate a sale of the building.
When a business files a petition in bankruptcy, it may have a number of employees who are owed payment for work performed prior to the filing of the petition. One of the most pressing questions for Rockland County individuals who work for firms entering into bankruptcy is the fate of their earned but unpaid wages, health care benefits and retirement plan contributions. The answer to this question depends in part on whether the employer has filed a Chapter 7 petition and intends to cease operations or whether the employer has filed a Chapter 11 petition and intends to remain in business.
Many factors can force a business into bankruptcy. The most common reasons for a business to seek bankruptcy protection is too many debts and insufficient revenue. Shoddy business practices can also be an underlying cause. A popular restaurant on the Hudson River, La Marina, recently filed a Chapter 11 bankruptcy petition amid a blizzard of unpaid claims and allegations that its manager was involved in a city hall scandal involving Mayor Bill DeBlasio.
The Time Hotel opened in Nyack in May 2016. The owners saw the property as a boutique hotel that would attract urban tourists and business travelers, but the plan has not succeeded. Several of the Hotel's investors filed an involuntary bankruptcy petition against the Hotel in July 2018 (This blog took note of the filing on July 26, 2018). The business bankruptcy has not been resolved, and the trustee set Friday, February 15, 2019 as the deadline for interested parties to file proposals for resolving the bankruptcy.
The coffee shop chain Fika opened in New York City in 2006. The company was known for its sleek modern ambience, and its shops became very popular. 10 years after it opened, Fika had 17 locations in the city, and its owner was telling people that the company intended to expand into more U.S. cities and countries overseas
In a recent post about the status of the Sears bankruptcy, the efforts by the company's CEO Eddie Lampert to secure financing for a purchase of the company's assets received significant attention. The other shoe has apparently fallen, because recent reports from the bankruptcy that occurred on Jan. 14 indicate that Lampert's hedge fund ESL Investments has submitted a revamped bid for most of the company's stores and assets. The bid must still receive approval from the bankruptcy court in White Plains, N.Y., but Lampert appears to be the clear front-runner in efforts to feast on what is left of the formerly giant retailer.
Sears has several stores in Rockland County and elsewhere in downstate New York. The court handling the closely-watched business bankruptcy set a recent deadline for the submission of bids to buy the company. If no qualifying bids were submitted, the court stated that it would begin the process of dissolution. According to reports, only one bid was submitted, and it has several problems.
A previous post here discussed how sexual abuse lawsuits are forcing companies to seek protection under either Chapter 7 or Chapter 11 of the Bankruptcy Code. But, there is another issue that may cause companies to seek bankruptcy protection: embezzlement by a trusted employee.
Many factors can force a business to consider bankruptcy, ranging from management errors to unexpected loss of customers to natural disasters. Another kind of threat to an organization's financial well-being has forced several organizations to consider file a Chapter 11 petition: lawsuits from victims of alleged sexual abuse. One of the nation's most iconic organizations, the Boy Scouts of America, an organization with many connections in Rockland County, is apparently seeking advice about bankruptcy in response to a number of lawsuits alleging that young boys were abused by BSA employees or volunteers.
One of the principal concerns of dealing with a person or corporation that is in financial difficulty is the possible mismanagement of the debtor business. Assets may be sold for less than fair market value or simply hidden from creditors. The debtor may decide to pay some creditors and not others. The bankruptcy code has a provision that creditors can use to protect themselves: involuntary bankruptcy.