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Bankruptcy Liquidation Goes Online for Nashville Luxury Retailer
Bankruptcy is often the natural path when a retailer’s sales go from $1.3 Million in 2009, to $890,000 in 2010 and then on track to do less than $700,000 in 2011. That’s what happened with The Gallery at Belle Meade in the Green Hills area of Nashville. The Gallery sells art, upscale furniture and accessories.
When it filed for Chapter 7 bankruptcy, the retailer stated that it had about $380,000 in assets and over $2.7 Million in debts. Now many of those assets are being auctioned off online from August 16th through August 25th. You can check out the auction at McLemore Auction Company.
The Gallery could have chosen to file a Chapter 11 bankruptcy and continue its operations. Most Chapter 11 bankruptcies begin with the idea of continuing the operation of the business. The business owner gets time to try and work through the financial problems. However, as is often the case, sometimes an owner waits too long to seek the protection that a Chapter 11 can provide. If the Debtor is unable to formulate a plan that meets the requirement of the bankruptcy code a liquidation of assets such as we are seeing with the Gallery is often the result.
When a Chapter 11 is filed your creditors must immediately stop collection efforts. The cost of defenses of lawsuits in both time and money is often reduced. The owners can focus on just restructuring the business. Perhaps the business needs to close some of its locations like what happened in the Borders (book seller) bankruptcy. Sometimes a business simply needs time to delay making significant payments on debt and use the funds from operations to re-capitalize the business.
One thing a Chapter 11 will not do is increase revenue. Sometimes business owners increase revenue while in Chapter 11 because they are able to focus only on the actual operation of the business and not the daily dodge of debt collectors.
With the Gallery, the owners likely determined that an orderly liquidation of its assets would yield the greatest return for its creditors. As a result it chose to file a Chapter 7 bankruptcy. In Chapter 7 a Trustee is appointed to oversee the liquidation of assets. Once the assets are sold, the Trustee distributes the funds to creditors based upon the priorities established by the bankruptcy code. Although in this instance it appears assets are being liquidated, in most Chapter 7 cases filed in Knoxville no assets are sold either because they are encumbered by liens for more than their value or the assets are claimed as exempt by the Debtor.
Contact Knoxville – Sevierville Bankruptcy Attorney Dan Scott
If you are facing financial difficulties, don’t delay getting advice from an experienced bankruptcy lawyer. We assist clients from Knoxville, Maryville, Pigeon Forge, Sevierville and Jefferson City. We offer a free consultation so you can understand all of your options. Call TODAY at 865-246-1050.
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In Bankruptcy: Avoid Danger, Disclose All Your Assets to the Chapter 7 Trustee
I’m often asked, “Do I have to disclose that?” The question arises when folks are trying to come up with a plausible way to conceal an asset that has special value either in money or otherwise.
The answer is always, “In bankruptcy, you better disclose all your assets to the Chapter 7 Trustee.” The Bankruptcy Code requires the debtor to make a full and complete disclosure of all assets and all liabilities in the bankruptcy papers. Coupled with that requirement is the requirement to disclose all transfers of your property in the last year. One of the roles of the bankruptcy trustee is insure that the debtor discloses all of their assets. The purpose of the system is to provide for an orderly and fair distribution of assets to the unsecured creditors.
Despite repeated admonitions to disclose all assets some folks try to trick the system. Vicki Jean Fehrs is one of those people.
She filed her bankruptcy case in 2005 in Idaho but failed to make a full disclosure on her Read the rest of this entry »
Tennessee Bankers Say Reduce Public Notice of Foreclosures
I hate to say I told you so. But…..I told you so.
The Tennessee Bankers Association having just been victorious in creating a “work around” for that nasty “gotta tell the borrower we’ll likely foreclose you” statute, now want to reduce public notice to one (yes, 1) publication. Why? It’s just too costly!!!!!
Tennessee has one of the easiest and quickest foreclosure processes in the entire United States. You run the notice in a paper “of general circulation” in the county where the property is located 3 times, beginning 21 days out and boom: Foreclosure Day arrives. Last year, the Tennessee legislature thought the process was moving way too fast so they passed a requirement that a borrower be given a 60 day notice that the bank can foreclose the lien if the payments are not current. That statutorily prescribed notice only need be given once a year.
As noted above, less than a year later, the Tennessee Bankers Association convinced 100% of our lawmakers that the requirement was too onerous. Read the rest of this entry »