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Life After Chapter 11: Family Christian Stores Look to Recovery with New Plan

Filing for bankruptcy does not mean accepting personal or business failure. For many individuals and companies, bankruptcy means an opportunity to re-strategize and regain control of the company's finances. One recent example of a company emerging after bankruptcy with a new business plan is Family Christian Stores, a Grand Rapids, Michigan-based niche retailer. After completing the Chapter 11 bankruptcy process, the company's CEO plans to redefine the company's brand and better implement e-commerce into its business model.

Chapter 11 bankruptcy is a popular bankruptcy option for business owners who can not pay their business debts but want to reorganize their companies to become profitable. If you are a business owner considering filing for bankruptcy, work with an experienced bankruptcy attorney to determine all of your options and whether Chapter 11 bankruptcy is the right choice for you.

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Posted on in Bankruptcy

Bankruptcy is a difficult decision to make but sometimes it is the only option. If you having a difficult time paying your bills on time or at all, then bankruptcy should be a real consideration. But before you file any paperwork to begin the process, try these other options first.

One option is to you is to negotiate to settle your debts. Convincing your creditors to take smaller payments may be difficult but they may work with you if they feel that they will get their money. The alternative to a settlement might be a Chapter Seven or liquidation bankruptcy which can result in less of your bills being paid off. If you can restructure your own debts to a more manageable payment it may allow you to keep your property.

Another option is to take a proactive step before a bankruptcy trustee can by selling your stuff. This will allow you to dictate the property that is sold which can help to pay bills and may stop you from needing to file. It is slightly counter-intuitive because you are selling your property to not have your property sold but it might be beneficial.

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Waste and Recycling News reports that One Source Recycling has shut its doors due to Chapter 7 Bankruptcy. Residents who depended on the recycling service provided by One Source Recycling were surprised and concerned. There was already difficulty in locating nearby recycling centers and residents who traveled to the facility to drop off recyclables will have to find a new place to process the items. The change in service was quite sudden and there was no advance notice to customers.

Yet other residents will now have to separate their trash from the recyclable items, and this will be time consuming as well as inconvenient. One Source previously performed the service for these residents. This was one thing that was very convenient to customers.

One Source Recycling owes approximately $500,000 in debts, yet has an estimated $50,000 in assets to go towards that debt. The company had previously filed Chapter 11 bankruptcy three years ago and attempted a restructuring at that time. After a three year struggle to get the business back into the black, they have finally conceded.

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Mark Shale, one of Chicago's oldest specialty retailers, has filed for Chapter 11 bankruptcy, says a story in the Chicago Tribune. If the company fails to find financing or a buyer, liquidation is a possibility, they told the Tribune.

The documents submitted to the Bankruptcy Court for the Northern District of Illinois said that declining sales and the overall economic downturn have been detrimental for the company's overall business. The documents suggested that sales at the 83-year-old retailer have dropped about 60 percent in its last fiscal year.

The company was unable to fullfill their orders for fall merchandise because of a cash shortage, and before filing for bankrupcy, they tried to raise new capital, unsuccessfully. All of Shale's efforts to turn sales around have failed, and Maria Pinto, who has designed clothes for Oprah Winfrey and Michelle Obama, is also leaving her position as women's creative director.

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The second-largest newspaper publisher in America, Tribune Co., filed for bankruptcy in December 2008. It was the biggest bankruptcy ever in the history of the American media industry. The company has been in the process of emerging from a Chapter 11 bankruptcy protection and was granted approval of a reorganization plan that would enable this emergence. However, some creditors have opposed the settlement of legal claims stemming from the company's 2007 buyout and the way some bondholders are treated in the reorganization plan.

The creditors have demanded a halt to the planned emergence while they appeal. The judge of the case granted the halt, but with the condition that the creditors pay a $1.5 billion bond first. The creditors have refused to post the bond and have unsuccessfully attempted to modify the requirement.

According to the Chicago Tribune, the 4-year-old bankruptcy case has cost more than $400 million for Tribune Co. and could cost hundreds of millions more if the reorganization plan won't happen. Before the company can emerge from bankruptcy, it must also get the approval of Federal Communications Commission to transfer its television and radio broadcast licenses to the investment groups that now operate the company. Furthermore, Tribune Co. “has to arrange $1.1 billion in new debt financing and a credit line.”

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