The companies that own Brewzzi, a restaurant with two locations in Florida, have filed for bankruptcy. They are Glades Brewery Partners and Palm Beach Brewery Associates. Company representatives have filed a Chapter 11 proceeding in Bankruptcy Court, each seeking to restructure their debt.
As illustrated by this case, a bankruptcy filing does not necessarily mean that a company is not successful or is in danger of closing its doors. Just as the case in a personal bankruptcy filing, this step could be necessary because of an accumulation of debt over a period of time. One of the restaurants closed, the victim of an eviction proceeding by the landlord. Company representatives have said that they believe the Florida restaurant will be reopened shortly.
The restaurant owners have listed one debt as large as $1.7 million, with unsecured obligations listed at $650,000. Assets have been estimated at $2.5 million. A Chapter 11 proceeding requires the filer to submit a repayment plan to the court for consideration. If the restructure is approved, a period of up to five years may be designated to allow for repayment according to the terms of the plan.
For a company filing for bankruptcy, it could be a means to responsibly confront a significant debt burden, as well as persistent creditors. Filing for bankruptcy actually halts collection efforts by creditors, including repossessions, evictions and foreclosures. These same benefits are also available to individuals under a Chapter 13 debt reorganization or a Chapter 7 liquidation proceeding. For the owners of the Brewzzi restaurants, the hope is to obtain court approval for a restrucring of the businesses in a format that will allow the companies to continue to operate and work through their respective financial problems.
Source: South Florida Business Journal, “Brewzzi restaurant companies file for bankruptcy“, Emon Reiser, July 7, 2014