This is my week to talk about business bankruptcies. You know, these big business bankruptcy news stories are so intertwined with my small business bankruptcy law practice in Indiana. Needless to say, business bankruptcies of both large and small companies end up having a tremendous impact on the individual people whom I advise. First off, when a Sharper Image files bankruptcy, all the investors who own stock in the company see their retirement savings go down. When ATA shut down its operations last month, hundreds of Indiana citizens found themselves suddenly without work and, in many cases, without medical insurance coverage. As a bankruptcy attorney, I know only too well about job losses and big medical costs being two of the big factors that cause individuals to file bankruptcy. We live in challenging times, no doubt about it!
At the same time, precisely because big company bankruptcies are making headlines right now, it’s a good time for me to point out what a comfort it can be to have the bankruptcy law in place as a safety net when companies and individuals need it. (I’ve mentioned before in this blog that I played an important role in helping to draft the newest laws here in our state.) I hope that by calling attention to the many headlines we’ve been seeing lately about big-name companies filing bankruptcy, that all individuals, including business owners, will realize that sometimes a combination of factors beyond their control leads even the biggest of businesses to turn to the bankruptcy court for help.
Many of these big-name companies we’re reading about in the news will be continuing to operate, using the protection of Chapter 11 bankruptcy law. Frontier Airlines plans to keep offering its new service to Aspen, Colorado, in addition to its regular destinations. The bankruptcy courts gave Propex permission to offer an incentive plan to its employees to motivate the employees to help turn that company around. And, you can still order hundreds of items from the Lillian Vernon 2008 catalog, even though that company is using the time gained through their Chapter 11 bankruptcy filing to find a possible buyer for the business.
Bankruptcy law is all about two things: buying time to turn things around, or buying time for an orderly ending. In either case, the end result can be a brand new start for the people involved.