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Long Time Italian Restaurant Files for Chapter 7

After a decade of being in the same spot, an Italian restaurant that many say reminded them of the old Little Italy in Manhattan has filed for bankruptcy.

Benito's One Restaurant in New York City filed for Chapter 7 bankruptcy just one day after being evicted for owing the landlord $42,000 in back rent.

According to the filing in U.S. Bankruptcy Court, the eatery only had $171.26 in assets, yet owes $481,000. In assets the company literally listed everything it had, which included not only a stove and cappuccino machine, but also 100 pounds of chicken and another 100 pounds of seafood. Alcohol was also listed as an asset.

The attorney representing Benito's One Restaurant said that everything from the silverware to the boxes of frozen food will be sold in an attempt to pay off creditors. In total, 49 creditors are listed on in the filing, which includes the Internal Revenue Service that is owed $18,000.

While in New York City, where there are tons of restaurants this bankruptcy filing for Benito's One Restaurant still goes to show how a downed economy can still affect a business, regardless of where it is located and how long it's been open for.

With people tightening up budgets, more and more people are choosing the cheaper route of cooking at home, which means less money for restaurants. While a Chapter 7 bankruptcy is a liquidation of assets, other options include a Chapter 11 or Chapter 13, which would allow a restaurant - or any type of business owner - to reorganize and consolidate debt.

Source: Crain's New York Business, "Little Italy throwback declares Chapter 7," Laura Mortkowitz, 15 Dec 2010

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