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When Bad Things Happen to Good People ...

Bankruptcy May Be Your Option

Employees shut out of company's Chapter 7 filing

Barring an unfortunate event, like a natural disaster or fire, many of us in Oklahoma and around the country can be assured that when we punch out for the day, we still have a job to return to on the following day. That wasn't the case recently for some employees of a camera supply and photo services provider.

The employees have taken to Facebook and Twitter to express their outrage over returning to work, only to be locked out and unemployed overnight without prior notice. Their employer abruptly announced on its Facebook page that it would be closing its stores in the United States. The company, which first opened in 1939, filed for Chapter 7 bankruptcy protection and shuttered.

Chapter 7 bankruptcy does not involve the filing of repayment. Instead, proceedings under Chapter 7 involve surrendering most of the borrower's non-exempt assets.

In Chapter 7 cases, a bankruptcy trustee is appointed to administer the non-exempt assets, if any, and distribute either the assets themselves or the proceeds from selling, or liquidating, them among the creditors.

In its Chapter 7 filing, the company listed between $50 million and $100 million in assets and $10 million to $50 million in liabilities. Though these numbers do not match the profile of the majority of Chapter 7 filings for businesses, bankruptcy relief is still available to individuals and small businesses in Oklahoma.

For businesses, bankruptcy does not always amount to a closure. In many cases, bankruptcy protection allows businesses to remain open while reorganizing debts into a manageable plan. Businesses and individuals who are considering bankruptcy protection may benefit from talking to a skilled attorney about their legal options.   

Source: Chicago Tribune, "Calumet Photographic abruptly shuts down, files for bankruptcy," Tribune staff report, March 13, 2014

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