Tough financial times, recessions, and other unforeseen events can hit all kinds of businesses hard. Filing for bankruptcy protection can be one of the only realistic options when a business finds itself in a dire financial situation. However, despite the negative connotations associated with bankruptcy, it is always helpful to get assistance from a lawyer and complete the bankruptcy process to give the business a chance at survival.
An Orlando based restaurant company filed for bankruptcy, which will affect several chains and locations around the country.
Florida based restaurant chain in serious financial trouble
The company filed for Chapter 11 Bankruptcy protection in the Middle District of Florida due to a combination of prior economic hardship and losses sustained during the coronavirus outbreak in the Spring of 2020. The chains affected include various Brio locations located in St. Louis and Kansas City, Missouri, as well as others in Florida and throughout the country. Some locations remained opened for takeout and delivery orders during the forced lockdowns, but reduced revenue was a persistent problem despite the chain’s best efforts.
There were outstanding debts of several million dollars to banks, creditors, and lenders. Eleven different states in the country are also seeking back taxes. The sum of taxes owed to these states is over two million dollars out of the total debt.
The restaurant group was formed approximately two years earlier by the former president of Darden restaurants, which owned the Olive Garden and several other well known national chains. At that time, the flagship Brio and Bravo brands reported over $400 million in revenue the prior year, and were considered to be in good financial shape.
However, sales dropped a short time later and the chain relocated its headquarters to Orlando in an effort to innovate and take advantage of the area’s consistent tourism spending. Sales remained slow despite these changes, and they did not pick up in time to prevent the bankruptcy filing.
How does Chapter 11 bankruptcy help businesses?
This type of bankruptcy is essentially a form of financial reorganization and protection from the courts that is best for companies that are carrying very large amounts of debt. It gives the business a chance to function while still paying back debts, without ceasing operations altogether or having to deal with additional lawsuits and issues created by creditors.
Most businesses, regardless of size, can qualify for a Chapter 11 protection. After filing, the business can still retain control of normal functions, but government oversight may be required. There is also protection from additional litigation by creditors as long as the business follows the court’s instructions. After successful completion, the Chapter 11 case will usually either be dismissed and the business can return to normal, or it will be converted to a Chapter 7 case.
Bankruptcy should be considered a serious event, and a Fort Walton Beach bankruptcy lawyer should be contacted before making any business decisions.
Learn more about getting help from a bankruptcy attorney
There are lawyers in the Fort Walton Beach area who can assist businesses when the possibility of bankruptcy is imminent. Contact ASG Legal to learn more about services provided by a local attorney.