Businesses across New York and elsewhere have faced significant economic struggles in recent years. Consumers have been hesitant about spending money and millions of people have wrestled with periods of unemployment and difficulty finding new jobs. The state of the economy forced many business owners to make a difficult decision. Should we file for bankruptcy protection?
When it comes to a business, owners have control over the products and vision, but sometimes other factors are completely out of their control. New Yorkers may not have to look much further than the successful fashion designer Betsey Johnson to understand this.
Johnson opened more than 63 signature boutiques across the world that sold her signature fun, flashy and fashionable designs. Earlier this year, however, the state of her boutiques was not looking as good. The boutiques each held a going-out-of-business sale after they had been victims of the recession. Johnson’s company, Betsey Johnson LLC, opted to file for Chapter 11 bankruptcy protection.
Chapter 11 bankruptcy is an option for businesses that are interested in reorganization and restructuring, rather than complete liquidation and dissolution. The process, while not exactly fun, allows business owners to save their company by reducing past-due sales taxes and restructuring mortgages and debts.
Since filing for bankruptcy, Johnson’s brand has continued to thrive through other retail outlets, including online, wholesale and department store sales. The designer recently celebrated getting through this difficult time by throwing a huge party for her 70th birthday. Based on her continued success, it’s no wonder she felt like having some fun.
Other business owners can learn a valuable lesson from the fashionable designer. All companies face the challenge of getting through difficult financial times. Instead of trying to work on solutions alone, which can sometimes make matters worse, reaching out for support and protection is always an option. With effective legal support, owners can save their businesses.
Source: Crain’s New York, “Post-bankruptcy, Betsey just wants to have fun,” Sept. 12, 2012
- Filing for bankruptcy can be a complicated process, but it can provide relief and protection to both business owners and individuals. For more information on options like the one discussed in this post, please visit our New York business bankruptcy page.