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Bistro files for Chapter 11 bankruptcy

A bistro in another state recently filed for bankruptcy. The bankruptcy filing was specifically for Chapter 11 bankruptcy protection. Companies in Massachusetts that are struggling to keep up with their liabilities may benefit from this type of bankruptcy filing.

In the recent out-of-state case, the bistro, called Church & State, brought new drink and food options to an arts district back in 2008. However, it recently decided to file for bankruptcy in an effort to address various debts and protect itself from a continuing lawsuit that a former employee filed against it. An emergency hearing was recently planned to determine the business' plans for providing sufficient assurance of its future payment of outstanding bills, as it remains operational and continues to pay its staff in a timely manner.

A few years ago, the restaurant was named in a lawsuit for reported violations of the wage and hour law. The company reported that it tried to resolve the matter but that the litigation was costly both timewise and moneywise. When the suit started to affect the business, that is when it decided to enter bankruptcy to reorganize its finances.

Sometimes litigation, a struggling economy that leads to less consumer demand and other factors can unfortunately cause a business in Massachusetts to struggle to keep its assets higher than its liabilities. Fortunately, such businesses may be able to take advantage of Chapter 11 bankruptcy to reorganize themselves and thus finally get rid of major debt burdens. Huge benefits of this type of filing are that it can help to stop aggressive collection efforts by creditors, and the business that files for bankruptcy can continue to operate without losing its revenue generation potential and existing customer base.

Source: la.eater.com, "Church & State Files for Chapter 11 Bankruptcy Amidst Ongoing Labor Lawsuit", Farley Elliott, July 24, 2017

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