Question: I need to file a business bankruptcy because I’m losing money and my business is getting sued. I’ve started other businesses and some have worked out and I’ve sold them and made money. Other start-ups that I’ve been involved with haven’t worked out and I’ve closed them. Some businesses work and some don’t, I learned that.
But this time I think a bankruptcy for my business is the way to go because the business has accumulated too much debt in a short span of time and because the company is getting sued, and I just don’t want to deal with it any more.
I started the business with a friend who worked at Coca-Cola and another friend from Delta Airlines. We all grew up together in Dunwoody, went to Dunwoody High school, and then to Georgia State University, and we always wanted to start a business.
So we started a software company and we thought we’d do well. I’ve been in software ever since I left the Atlanta Braves organization. My friends quit their jobs and we began the company. The problem was that neither friend had knowledge of the software business and neither wanted to learn. They thought that running a business was taking vacations, sitting on a beach and drinking beer, and maybe smoking pot. I’ve got nothing against that, but someone has to work it. Basically, I was the only one working, and we started to lose money immediately.
I finally bought them out, but now the company really isn’t worth saving and I don’t know if I could save it even if I wanted to.
I know from a friend that you are an Atlanta business bankruptcy lawyer and I wanted to write and see if the business can go bankrupt. If I can close the business and make the lawsuit from a distributor go away I’d be happy. The lawsuit is in the Fulton County Superior Court and paying to defend it will cost a lot of money that I don’t have.
L.L. in Atlanta, GA
Answer: As Georgia bankruptcy lawyers, that's a frequent question. A business or company can file bankruptcy under the law. In fact, many business owners and entrepreneurs file business bankruptcy. The law enables them to close failing businesses. The law allows business owners and entrepreneurs to financially escape from under a bad, failing or simply unprofitable business.
By allowing unprofitable businesses to close and to limit their legal and financial exposure and liabilities, the law helps owners and entrepreneurs to start other businesses. It helps them better allocate investment capital, resources and time to profitable companies that can thrive, flourish and make money.
The most common form of business bankruptcy is a chapter 7. Businesses, just like individuals, can file bankruptcy. To file a chapter 7, companies must close-up completely and cease all operations. It can’t remain in business; it can’t remain open.
Many companies file to stop creditor harassment, lawsuits, and to escape from paying bills they can’t afford. Chapter 7 can be a powerful and very helpful tool for a business that is doing poorly. Instead of struggling, many smart and experienced business owners simply put their business in chapter 7.
If you live in Fulton County, you would file bankruptcy in the Northern District of Georgia.