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When Should a Restaurant File for Chapter 11 Bankruptcy?

A restaurant may struggle to stay open during COVID restrictions.Unfortunately, COVID-19 has resulted in many bankrupt restaurants. A lot of restaurants had to close their doors because of the pandemic and the social distancing regulations that were put in place. If your business has not been able to ride this storm, you’re not alone, and filing for Chapter 11 bankruptcy may be the right solution for your situation right now. 

With that in mind, read on for our guide to filing for bankruptcy as a restaurant owner.

The Impact that COVID-19 Has Had on the Restaurant Sector

Over the past year, a lot of bars and restaurants had to shut their doors because local governors ordered them to do so. While many of these establishments have been given permission to reopen, the unexpected and sudden revenue loss has had lasting effects. A lot of businesses have not been able to ride this storm, especially small family restaurants that need to be open every day. Rather than closing indefinitely, filing for Chapter 11 bankruptcy may be the best solution for those who want to keep their restaurant doors open.

What Happens When a Restaurant Files for Chapter 11 Bankruptcy?

A lot of business owners assume that filing for bankruptcy means they will need to close their business for good. This is not necessarily the case. Chapter 11 is a type of bankruptcy that involves debt restructuring, as opposed to your assets being liquidated. The latter is Chapter 7 bankruptcy. Because of this, you could be able to keep your restaurant doors open. Nevertheless, there are a number of different rules you will need to follow to keep control of your business.

What to Expect When Filing for Chapter 11 Bankruptcy

So, what will happen should you file for Chapter 11 bankruptcy? If you file for bankruptcy, you will typically be permitted 120 days so that you can put together a plan for reorganization. The steps that you take within this four-month period can have a significant impact on the future success of your food establishment.

If you are considering going down this route, one piece of advice that we would give you is to avoid waiting until you are insolvent to declare bankruptcy. If your business is in trouble at the moment, the sooner you act and get in touch with our legal team the better.

Contact Us Today if you Need Help with Chapter 11 Bankruptcy 

If your restaurant is going through a difficult period and you feel that Chapter 11 bankruptcy is a must, please do not hesitate to get in touch with our team at Aldrich Legal Services today. We have more than 21 years of experience in the industry, and our friendly and professional team is always happy to help. We look forward to hearing from you. 

MICHIGAN REAL ESTATE 95: Property owners did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves.

When the delivery of a deed is contingent upon the happening of some future event, title to the subject property will not transfer to the grantee until the event has occurred. However, in this case A and J did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves, then deposited the deed with their attorney with the instruction to record the deed only upon the happening of a future event, thereby placing a condition only upon the recording of the deed.

MICHIGAN PROBATE 57: Brother granted permanent guardianship of siblings.

At a multiday hearing to address the extension of the guardianship, the eldest children, the mother’s relatives and friends, and school personnel testified regarding the mother’s care of the children, appellant’s treatment of and interaction with the children, and the eldest siblings’ role in aiding the mother to raise the children.

FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

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