Bankruptcy, I’ve reflected more than once, represents the ultimate in compromise. Different parties with different needs share a dilemma. Any compromise will never be 100% good for all the parties. I like to refer to the Indiana bankruptcy court system as a safety net. At the same time, after almost twenty five years of helping individuals and businesses use that safety net, I know it’s still only a compromise and not the ideal solution to everyone’s problems. I always try to keep on learning more about bankruptcy and how it’s handled in other states, and the other day I was reminded of the concept of compromise by something happening in New England.
A company called Haven Healthcare recently filed bankruptcy in Connecticut. Haven Healthcare runs nursing homes throughout the area, including Rhode Island, New Hampshire, Massachusetts, and Vermont in addition to doing business in Connecticut. That means the company was a big payer of property taxes in those states, in addition to paying the state fees charged for operating nursing homes. With the bankruptcy case now in progress, all those towns in New England are waiting to get paid those fees and taxes. Then, while Haven is trying to reorganize under the bankruptcy plan, it’s still taking care of patients. Since the company rents some of its property, many landlords haven’t been paid, and they, in turn, are having trouble keeping up with their own mortgages. Reminds me of the TV commercial for a depression-treating drug. “Whom does depression hurt?” the commercial asks? The answer: “Everyone!” It seems the bankruptcy court will have its hands full being as fair as possible to all the parties involved in this particular business bankruptcy.
As I repeatedly urge business owners and families – Get Help Early! The earlier I can begin my work with clients (whether bankruptcy turns out to be advisable or avoidable), the fewer parties are likely to be hurt, and the hurt is likely to be less.