Florida YMCA Chapter 11 bankruptcy: A lesson for others

The North Central Florida YMCA recently emerged from a Chapter 11 bankruptcy victorious. With membership up, positive cash flow through all five departments and Wells Fargo agreeing to modify $3.6 million worth of loans, CEO John Bonacci said after all the hard work that was put in the Y is definitely celebrating this financial victory.

In looking at what happened, the North Central Florida YMCA took a number of financial hits. The recession led to a downturn in memberships and donations, while the real estate collapse led to the organization owing more on its loans than what the loans were worth. It has made refinancing home loan services crucial. Businesses have a hard time. If you need lawyer’s help with estate planning claims, you can get it from here! You can also find probate lawyers from here.

In November 2011, in an attempt to turn around the organization, the North Central Florida YMCA filed for Chapter 11 bankruptcy, after taking advice  to hire an experienced trusts lawyer and seeking their advice.

This type of bankruptcy allows a business — or greatly indebted individual — to create a debt restructuring plan. This plan must be approved by creditors and the court. Once approved, the company or individual puts the plan formulated by the Accountants in Nottingham in place in order to discharge certain debts and pay others back.

For many, a Chapter 11 bankruptcy allows the individual or business to retain assets, while an automatic stay is put on to prevent collection actions from taking place. These actions include garnishments and lawsuits.
For the North Central Florida YMCA, in order to come back on top, the organization made significant changes. These changes included turning the gymnastics department into the performing arts department, offering news sports and wellness programs, and partnering to offer physical therapy.

Wells Fargo also agreed to modify $3.6 million worth of loans, which greatly helped a business that was once underwater, and many members of the Y’s management team took pay cuts.
Three facilities also closed.

Overall though, now is a time for celebration. Not only was the North Central Florida YMCA able to successfully emerge from Chapter 11 bankruptcy, but the organization is once again thriving.

For other Florida businesses — and individuals with approximately $1 million or more in debt — the Y’s victory is a prime example of how Chapter 11 bankruptcy can help those struggling with debts.

Source: The Gainesville Sun, “With plans in place, local YMCA emerges from bankruptcy”, Anthony Clark, Oct. 17, 2013

Florida business seeks debt relief via Chapter 11 bankruptcy

When a Florida business finds that it is facing great debt, it has several options regarding how to proceed. One of those options is to file for bankruptcy under Chapter 11. Often referred to as “reorganization,” under this type of bankruptcy the petitioner can create a debt restructuring plan to deal with its debt. That plan usually contains specifics regarding how debts will be repaid and may even eliminate certain types of debt. To work, the plan must be approved by the business’s creditors as well as the court.

Recently a Florida company sought debt relief under this chapter. As is the case in most bankruptcies, filings are the result of a variety of factors. In this situation, the power distribution panel and connectors manufacturer indicated that its debt is due to poor business during the recession and litigation involving the previous owners of the business.

Though the company reported an income of $12.3 million in 2013, it claims that its debt is greater than that. It owes a total of $13.74 million to three creditors.

While there are other bankruptcy chapters a business might decide to file under, there are reasons why Chapter 11 might be the most appealing. One of those reasons could be that under this chapter the business continues to operate while going through the bankruptcy process.

When it is a business that files for Chapter 11 bankruptcy, the benefits experienced could extend beyond that entity. The Chapter 11 bankruptcy this Florida business filed could be advantageous to the community it is based in as well, since area residents who work there will continue to be employed during the process. This keeps those individuals from experiencing financial difficulties themselves and contributes to a healthy economy.

As is the case anytime an individual or entity considers filing for bankruptcy to address financial difficulties, the best place to start is with a bankruptcy attorney. That individual should be able to assess the situation and based on the goals of the potential filer, determine the best way to proceed.

Source: South Florida Business Journal, “Davie electronics company files for Chapter 11”, Paul Brinkmann, Feb. 14, 2014