Every once in a while, the filing of a Chapter 7 bankruptcy in Pennsylvania or another state marks the end of life for a cherished local tradition. It may be an ancient landmark connoting a significant historical event. It could be an old hotel that catered to the rich and famous, perhaps a favored watering hole and popular night spot, or a restaurant famous to the local people. Although few would like to see it close forever, there are no economic pathways that lead forward, and the announcement is made to close the doors via Chapter 7 bankruptcy.
The business may have been languishing in insolvency for many years but trying to tread water in a sea of overwhelming debt, just to satisfy the romantic visions of the owner or the townspeople. A Chapter 7 is a practical way for the entity to close, liquidate its assets, pay some of the bills and obtain peace of mind and financial closure. Alternatively, if there is a viable economic future, a financially challenged company may turn to Chapter 11 to try and turn things around by way of a reorganization proceeding. In this case, however, it appears that a Chapter 11 filed in 2011 gave way to having the case resolved through conversion to Chapter 7.
An unhappy scenario appears to be unfolding in Beach Haven, New Jersey, a shore area that many from Pennsylvania are accustomed to enjoying as a summer vacation break. The venerable Surflight Theatre announced the filing of a Chapter 7 bankruptcy. That is the liquidation chapter, where the assets are generally sold and the proceeds used to pay creditors. A trustee handles that process.
Chapter 7 does not contemplate continuing the business, and its affairs will be brought to an ordered conclusion. For the Surflight, it was the culmination of years of fighting to keep the community asset opened and functioning, but efforts to raise sufficient operating funds ultimately could not be sustained. For consumers in Pennsylvania, a Chapter 7 filing may often not include relinquishing assets — the purpose may be simply to eliminate large amounts of unsecured debt. Those details are always best determined in consultation with one’s bankruptcy attorney.
Source: courierpostonline.com, “Surflight Theatre declares bankruptcy, shuts doors“, Jean Mikle, Feb. 25, 2015