Los Angeles Bankruptcy Lawyer Blog

A Long Beach corporate bankruptcy may be necessary for small firms that are seeing incremental gains and expanding debt.

Long Beach business bankruptcy attorneys know that stagnant economic recovery is to blame for the fact that not only are companies not investing in internal growth, often, they are taking on more debt to stay afloat.

A recent report by CNNMoney indicates that while small firms may be doing generally better overall than they were just a couple years ago - consumer demand is up - most small businesses are still struggling to dig themselves out of a financial pit.

The example given was of a frame maker, who, during the height of the recession, owed an estimated $30,000 to his glass, wood and paper suppliers. Within the last two years, the owner has paid that down to a balance of $10,000, but the market uncertainty has prevented him from taking out a loan that would allow him to pay off the balance to his suppliers. As the small business owner deftly pointed out, he was loathed to owe the bank any money. Vendors, he said, might at least work with him, while the banks are known for their ruthlessness.

However, some small business owners get to a point when the vendors are too many and the bills too high. This is when a bankruptcy filing may be the best option. And just as a personal bankruptcy doesn't equal financial ruin, a business bankruptcy doesn't have to mean that either. The best way to truly know what it might mean is to discuss your options with an experienced Long Beach business bankruptcy attorney.

For those firms that have thus far weathered the economic storm, they know it's not over yet, and are cautiously wading back into expansion. But the risk of drowning is still very real.

A survey of about 760 small businesses indicated that owner confidence dipped in March - the first decrease that factor has seen in a half a year. Another think tank showed that 43 percent made no effort to borrow funds in 2011. Compare that to 44 percent in 2009, and it shows not much has changed, despite the optimistic outlook of some economists.

However, one area that is seeing a spike in revenue are alternative lending sources - namely cash advances for merchants. These are essentially propped up by online peer groups and crowd funding websites that connect small firms with potential supporters and investors. There is a gaping hole that has been left by the banking industry withholding loans to borrowers who may be less than creditworthy.

But these can be risky investments, and there is a danger for businesses in accepting these loans when they won't have the future funds to pay them back.

As one chief investment officer from San Francisco was quoted as saying, it's as if a doorbell rung in 2008, saying, "Maybe there's such a thing as too much debt."

Continue reading "Long Beach Corporate Bankruptcy Still a Reality for Many Small Businesses" »

Historic Eastman Kodak and Twinkie-maker Hostess are two companies that recently filed for corporate bankruptcy protection, which has shocked people not familiar with the bankruptcy process and set off campaigns to help the companies.

Los Angeles bankruptcy lawyers recognize that corporate bankruptcy in Los Angeles is highly beneficial to companies who want to have a better future.

In most cases, filing for bankruptcy simply means the company wants to improve their future. It's the same for consumers. No one files for bankruptcy because they are uninterested in improving their financial outlook.

We reported on our Los Angeles Bankruptcy Lawyer Blog last year that multi-billionaire Donald Trump has filed for bankruptcy four times through his various companies.

Most people wouldn't consider Trump a failure at business because he has ridiculously large corporations and makes millions of dollars a year. Yet, he filed bankruptcy not because he wanted to see his companies flounder, but because he recognized the benefits to using bankruptcy protection laws for his businesses. The same is happening for Kodak and Hostess.

The Wall Street Journal reported recently that Eastman Kodak filed for bankruptcy with a goal of cutting back on what it owes retirees and forcing large technology companies to pay to use its patents. The newspaper reports that the company is hoping to shed its photography side of the business -- on which the company was built in 1889.

In the other case, Hostess, the sweet treat company that makes the iconic Twinkies, has filed for Chapter 11 bankruptcy protection. The company filed for bankruptcy three years ago and was able to restructure.

It is doing it again because it has $860 million in debt, mostly due to expenses tied to its labor force, The New York Times reports. The company has 100,000 or more creditors and many of them are labor unions and pension funds representing its workers. By filing for bankruptcy, the company may be able to lose some of its debt obligations and shrink its workforce while still pumping out the sweet treats that many Americans buy.

The bottom line here is that both of these companies see the benefits of corporate bankruptcy. It is a sign that both companies have plans to continue thriving, but need a little help. Getting lenders to continue allowing a company to borrow money can be a problem when debt creeps up.

Filing for bankruptcy allows the debt that is causing a company to struggle to be dismissed while getting creditors off the back of corporate officials. And if creditors are kept at bay, that can allow the business to get back on track.

While the issues are different for these two iconic companies, their problems are similar. They need to shed debt to improve creditor rating and the availability of creditors. Without this improvement, they will flounder. Bankruptcy provides the way to improve the future of the company.

Continue reading "Hostess, Kodak Show Why Los Angeles Corporate Bankruptcy Is Beneficial" »

Forbes Magazine recently reported that multi-billionaire Donald Trump has filed for corporate bankruptcy four times in the last two decades.

The story of Trump, a real estate and development mogul, TV star and potential U.S. President candidate, shows why having an experienced Los Angeles bankruptcy attorney is important to dealing with financial challenges -- whether in business or in your personal life.

Trump filed for corporate bankruptcy in 1991, 1992, 2004 and 2009 because his casino and hotel properties in Atlantic City were over-leveraged.Trump Entertainment Resorts operates the Taj Mahal, Trump Plaza and Trump Marina. He has never filed for personal bankruptcy, Forbes reports, which is key in his ability to emerge relatively unscathed financially.

The magazine reports that in the 1990s, Trump used his own wealth to guarantee payment of bonds and interest, causing him to have to sell his Trump Princess yacht, Trump Shuttle airline and his stake in other businesses to pay off about $900 million in personal debt.

Trump has said he was able to use the country's bankruptcy laws to his advantage to restructure debt, free up capital and improve his businesses, just as many successful business owners have done. Trump isn't the only celebrity to use Chapter 11 bankruptcy laws to his advantage.

In fact, many actors, athletes and even a U.S. President have used the law to reorganize their finances. The list includes singer Willie Nelson, boxer and entrepreneur George Foreman and President Thomas Jefferson.

Bankruptcy in California isn't a one-size-fits-all solution. Bankruptcy can be used by businesses as well as individuals and can be used to save your home from foreclosure or buy time to pay off expensive bills or credit card debt.

Continue reading "How Donald Trump Filed for Bankruptcy Four Times and Survived" »