As a business owner, you deal with risk every day. According to the Bureau of Labor Statistics, less than 50 percent of small businesses survive past the four year mark, and only 65 percent last for two years. If your business is a restaurant, chances are you won’t even last a year. Even long established businesses can face failure due to advances in technology and other market trends. Suppose you had a thriving typewriter repair business prior to the early 1980s?
According to a recent article in CNN Money, electronics industry stalwart RadioShack, who declared bankruptcy earlier this year, is having a complicated legal struggle regarding its debts. The company began selling itself off by shutting down over 1,700 locations. However, 1,400 franchise locations were bought up by a hedge fund and remain open. The main issue that is currently tangled in legal wrangling is the $46 million in unredeemed gift cards that are still out there. The gift cards are considered part of the company’s debt, but can’t be forgiven under the general bankruptcy guidelines. Bankruptcy proceedings tend to be lengthy and creditors may wait for years to find out how and when they’ll be paid.
If you are a business owner, your future is decided quarterly. There may come a time when keeping your company alive is just not feasible. How you proceed in such a situation can affect your financial accountability and future business prospects.
Before you take any action, it is important to contact an experienced bankruptcy attorney. The Los Angeles law firm of McFarlin LLP has counseled many business owners over the past few decades and led them to make the best decision possible in light of their situation. Call the esteemed legal team at McFarlin LLP today at (949) 544-2640, or toll free at (888) 728-0044, for a free consultation.