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TechShop Declares Bankruptcy and Shuts Down All Locations in the United States

TechShop, a membership-based communal workspace for artists, designers, and tinkerers with locations across the United States and abroad, abruptly closed its doors in November of 2017. Along with this closure came an announcement that the company filed for Chapter 7 bankruptcy. All locations in the United States closed, while those outside the country remain in operation.

TechShop operated from 2006 to 2017. Recently, in an effort to remain financially solvent, it moved away from opening and operating its own makerspaces to focus on helping universities and nonprofits launch their own makerspaces. A makerspace is a large, open area outfitted with work benches, tools, and other equipment to design and build objects. For individuals who do not have the space or money to purchase and store this large equipment for themselves, makerspaces make it possible to access this type of equipment. They also offer safety courses and in some cases, educational seminars where members can learn about different equipment and techniques.

Chapter 7 Bankruptcy for Businesses

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Can a Church File for Bankruptcy?

Yes, a church can file for Chapter 11 bankruptcy if it reaches a level of debt that it cannot repay on its own. Because a church is not a for-profit company, different rules apply to a church bankruptcy. Churches and other religious organizations can file for Chapter 11 to work out debts and avoid accruing new debt in the future by restructuring, just like private companies do. Often, churches accrue debt from their mortgages and the other expenses of operation. There have been cases in which churches have filed for bankruptcy as a way to settle claims of sexual abuse. By filing for bankruptcy, the churches are protected from debt collection efforts and may be able to reduce the amount of compensation they are ordered to pay to their victims in the event their clergy or other church officials are found guilty of sexual abuse or other forms of mistreatment.

A Church Cannot be Forced into Involuntary Bankruptcy

One significant difference between church bankruptcies and bankruptcies involving private companies is that a church cannot be required to complete an involuntary bankruptcy. An involuntary bankruptcy occurs when a company's creditors file a bankruptcy petition with the court to start the bankruptcy process. This is only possible when certain circumstances are met, which include:

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Sexual Abuse Survivor Group Rejects Archdiocese's Chapter 11 Bankruptcy Plan

The Archdiocese of Saint Paul and Minneapolis has filed for Chapter 11 bankruptcy and submitted a reorganization plan after facing multiple sexual abuse allegations. In a reorganization plan, the filing party's creditors can make comments about the proposed plan and either accept or reject the plan's terms. Whether these are incorporated into the final approved plan or not is at the discretion of the bankruptcy court overseeing the case.

In the case of the Archdiocese's bankruptcy, a group of survivors of the alleged acts of abuse have rejected the current plan and its proposed way to compensate them. The current proposed plan is for the Archdiocese to pay $13 million to the victims. The victim group proposed a new plan that involves the Archdiocese paying them $80 million out of its own pocket. They claim that the Archdiocese negotiated its claim exposure value with its insurers without them and that the true value of its claim exposure is higher than its stated $114 million.

Nonprofit Organizations can File for Bankruptcy

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Payless Shoes to File for Bankruptcy and Plans to Close 500 Stores

Payless Shoesource, Inc., a mall staple and go-to shoe supplier for consumers across the country, has announced that it will file for bankruptcy as soon as early April 2017 to address its $655 million debt. Much of this debt is outstanding payments to Chinese factories, which sparked protests at a container freight station in Xiamen, China. Allegedly, this debt is hurting the manufacturers, and when they reached out to Payless to collect the payment, Payless refused to comment on when the payment would come. The company also threatened to cease doing business with them if they did not continue to produce shoes for the retailer.

Payless, which was founded in 1956, currently operates more than 4,000 locations in 30 different countries. Originally, the company planned to close approximately 1,000 stores, but that number has now been reduced to a planned 400-500 closures over the next three years. However, it is not guaranteed that the company will not opt to close more stores in the future, bringing its number of shuttered locations closer to its original estimate.

What Hurt Payless?

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What is Chapter 22 Bankruptcy?

You might have recently heard or read that Radio Shack filed for “Chapter 22” bankruptcy. This is not an actual chapter of bankruptcy. Rather, it is a euphemism used to refer to a company's second bankruptcy, playing on the idea that two Chapter 11 filings equal one Chapter 22 filing. Radio Shack's most recent bankruptcy filing comes just two years after its 2015 restructuring. This time, its current owner, General Wireless Operations, aims to liquidate all of its remaining retail locations.

Sometimes, it is necessary to file for bankruptcy more than once. Through bankruptcy, an indebted individual or company can have its debts discharged. For Chapters 7 and 13, the two bankruptcy chapters utilized by individuals looking to discharge personal debt, filers must wait specific lengths of time after their first discharges to have new cases discharged. With Chapter 11, there is no limit. However, if the company that wants to liquidate all or substantially all of its assets, it cannot have debt discharged if it has had debts discharged through a Chapter 7 or 11 bankruptcy case filed within the past eight years.

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