When businesses are struggling, there can be limited options to get on stronger financial ground. Chapter 11 bankruptcy is often viewed as a last resort, but it can help to save the business. A restaurant chain recently closed one of its few remaining spots in New Jersey as part of a Chapter 11 filing.
The gastropub chain Bar Louie has taken steps to improve its financial circumstances by filing for Chapter 11 and closing many locations, including one in Woodbridge. The closure happened suddenly. A subsequent message on social media was posted and removed. However, there was a sign on the door of the location thanking its customers.
A statement was later released by the company. It said, in part, that the goal of strengthening its financial circumstances required the closure of 38 locations that did not meet performance expectations. Only two locations remain open in New Jersey. The Chapter 11 filing has resulted in lenders giving the business financing, which will allow it to continue operations in the remaining locations. The company was founded in 1990.
For many businesses, a Chapter 11 filing is the most efficient way to continue operating, get a handle on debt, keep creditors at bay and move forward. That sometimes requires making difficult decisions like downsizing or closing locations. Business owners might perceive Chapter 11 bankruptcy as something to avoid. In reality, it is a useful strategy as a business’s long-term prospects may be improved with a Chapter 11. When a business owner is thinking about ways to get on stronger financial footing, contacting a law firm experienced in Chapter 11 cases may be helpful in determining the next step.