California Pizza Kitchen and Sizzler Steakhouse have filed for bankruptcy in California after suffering significant losses due to coronavirus shutdowns. California Pizza Kitchen is close to reaching a deal with its creditors, while The Sizzler has just begun the process of filing for Chapter 11 bankruptcy.
The Sizzler chain has 107 locations located throughout California. In its bankruptcy application, Sizzler stated that filing for bankruptcy is a direct result of having to shut down due to the COVID-19 pandemic. Only 14 corporately-owned restaurants are part of the bankruptcy. Many of the company’s restaurant locations are independent franchises.
Filing for Chapter 11 Bankruptcy in Los Angeles
Chapter 11 bankruptcy involves a reorganization of the applicant’s debts, assets, and business affairs. Corporations, partnerships, and limited liability companies (LLCs) can file for Chapter 11 bankruptcy. Typically, individuals who have significant debt do not qualify for Chapter 11 and Chapter 13 bankruptcy, but individuals can file for Chapter 13 bankruptcy in rare cases.
Chapter 11 bankruptcy is well-known as reorganization bankruptcy, and it is named after Section 11 of the Bankruptcy Code. The Chapter 11 bankruptcy process is the most complex of all of the bankruptcy processes. If you are considering filing for Chapter 11 bankruptcy, it is important to discuss your case with an experienced Los Angeles bankruptcy lawyer.
During the Chapter 11 bankruptcy process, a bankruptcy court will help businesses restructure their obligations and debts. In most cases, the company will stay open and operating while paying off debts and going through the bankruptcy process.
What are the Benefits of Filing for Chapter 11 Bankruptcy?
There are several advantages to filing for Chapter 11 bankruptcy. One of the key benefits is that businesses can continue to operate while paying off their creditors. As you go through the debt reorganization process, you will be able to pay back your unsecured debt partially. After you submit your application, your creditors will not be able to harass you at your business or your home, giving you time to develop a plan to repay your debts.
Additionally, you will be able to restructure any secured debts. The bankruptcy trustee, who is in charge of your case, will help you create a plan to make payments to creditors that are often lower than your previous payments. These payments will also be spread out over a longer period, making it easier to manage them.
When to Consider Filing for Chapter 11 Bankruptcy
Opening a business can be extremely risky, especially in our unprecedented economic times during the coronavirus pandemic. Has your company been struggling financially over the last six months, mainly due to shut-downs? Are you struggling to gain a profit over several consecutive months? If so, filing for Chapter 11 bankruptcy could be your best option. Doing so could also allow you and your company to maintain better financial security. Contact our San Diego bankruptcy law firm as soon as possible to schedule your initial consultation.
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