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Bankruptcy for Fruit of the Month

By Susanne Robicsek, North Carolina Bankruptcy Attorn

Harry and David filed a Chapter 11 bankruptcy.  The company famous for Oregold Peaches (9 for about $30), Fruit of the Month Club, and lots of jams and snacks and gift baskets has filed a reorganization under Chapter 11, which means that it will continue to operate but it will trim it’s operation, likely writing down debts and possibly closing retail stores and rejecting leases.  Bankruptcy attorneys for business debtors often know their exact plan of action when they file a Chapter 11 case.  They prepare and distribute a plan of reorganization to it’s creditors to be voted upon and approved by a bankruptcy judge. 

Many companies  are finding that it is difficult to maintain the income to support the expansions made during the economic boom now that the economy has fallen and people are spending less. Chapter 11 reorganization bankruptcymay be the only way a company can continue to stay in business.  Rather than shut down completely, it provides a plan of repayment that allows it to operate profitably by stretching out payments and/or reducing debt and costs.  Large companies might file Chapter 11 to reduce it’s debt load or to get out of unfavorable contracts such as long term leases, employment agreements or pension plans.

It is becoming more common for individuals to file Chapter 11 for a number or reasons, primarily because of the higher debts borrowed to buy real estate over the last decade.  However, for most ordinary people who want to reorganize, Chapter 11 isn’t usually a good option.  Most individuals consider Chapter 13 bankruptcy which allows people to catch up house and car payments, and protect property that they might loose in Chapter 7 bankruptcy.  Individuals can file for Chapter 11 but it is an expensive and complicated process.  If a person files Chapter 11 they usually have a lot of debts and money, or a businesses.  Chapter 13 is a lot easier and less expensive than a Chapter 11, and provides protection for people while reorganizing their budgets and debts.

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Full post as published by Credit Law Network on March 28, 2011 (boomark / email).