A seafood restaurant in another state recently experienced dwindling revenue as well as management-related changes. As a result, restaurant leaders decided to file for Chapter 11 bankruptcy. Companies in Massachusetts that are financially struggling may benefit from doing the same to get back on track.
In the out-of-state case, the seafood restaurant’s dwindling revenue was partly due to natural disasters. Specifically, Hurricane Irma ended up forcing the eatery to close between September and November of last year. In the more distant past, the restaurant also sustained major damage as a result of Hurricane Matthew.
The restaurant currently owes more than $560,000 on a bank mortgage. The restaurant’s revenue so far in 2018 is $890,000. The revenue during the past two years was $3.3 million and $2.8 million in 2016 and 2017 respectively. The restaurant dates back to 1974, but management changed in 2012, and at that time, the quality of the restaurant reportedly dropped, leading to the loss of patrons. Since then, the eatery has been unable to satisfy its creditors in a timely manner.
The benefit of a Chapter 11 bankruptcy filing is that it allows businesses in Massachusetts and elsewhere to reorganize their debts to make them more manageable. In many cases, companies who have gone through the Chapter 11 bankruptcy process can remain in operation and come back even stronger as a result of the bankruptcy filing. Of course, the filing process is multi-faceted and thus can quickly become overwhelming. An attorney can help a struggling business owner to complete the filing process properly in pursuit of the second chance he or she needs to keep the business afloat.
Source: firstcoastnews.com, “Popular restaurant Clark’s Fish Camp files for Chapter 11 bankruptcy to restructure business“, April 17, 2018