Outfox Hospitality, the parent company of Dom’s Kitchen & Market and Foxtrot Market, filed for Chapter 7 bankruptcy, with the help of a Chicago Chapter 7 bankruptcy lawyer, weeks after abruptly closing its 35 locations. This sudden closure affected employees, suppliers, and customers. Outfox, formed from the recent merger of Dom’s and Foxtrot, reported having between 5,001 and 10,000 creditors, with assets and liabilities both estimated between $10 million and $50 million.
Despite the bankruptcy filing, Foxtrot’s founder, Mike LaVitola, is reportedly exploring options to revive the brand and reopen some stores. LaVitola has been discussing with former management and some Chicago landlords about potential deals to relaunch the brand.
In Chapter 7 bankruptcy, a company typically aims to liquidate its assets and cease operations. However, legal expert Omar Ochoa noted that LaVitola could buy the company’s assets through the bankruptcy sale, potentially with investors, and start a new company. Yet, protections for creditors within bankruptcy proceedings ensure they are paid, preventing unfair advantages in asset acquisition.
Secured creditors are prioritized for payment, followed by unsecured creditors and stockholders. Payroll and tax obligations are addressed last, complicating matters for former employees who have filed lawsuits alleging violations of worker protection laws. Additionally, two produce suppliers have sued Foxtrot for over $208,000 in unpaid goods.
A class action lawsuit could help employees secure a higher payout priority. However, ongoing litigation against a bankrupt company is typically consolidated into bankruptcy proceedings, making it difficult to pursue separate legal actions.
Skilled Chicago Chapter 7 Bankruptcy Lawyer For Smaller Businesses
Small to mid-sized businesses may face bankruptcy, either as a strategic restructuring procedure or to shutter the business. If you’re concerned about your business’s solvency, we can provide insight and advice about the merits of filing Chapter 7 bankruptcy.
A Chicago Chapter 7 bankruptcy lawyer guides individuals and businesses through the process of liquidating assets to discharge debts. Their primary role is to help clients understand if Chapter 7 bankruptcy is the right choice, given their financial situation. This type of bankruptcy, often called “straight bankruptcy” or “liquidation bankruptcy,” involves a court-appointed trustee’s sale of a debtor’s non-exempt assets to pay off creditors.
Your attorney starts with thoroughly assessing your financial status, including income, debts, and assets. They provide legal advice on the eligibility criteria for Chapter 7, which typically involves passing a means test to determine if the client’s income is low enough to qualify. Once eligibility is established, the lawyer assists in compiling and filing the necessary paperwork, such as the bankruptcy petition, schedules of assets and liabilities, and statements of financial affairs.
Additionally, a Chapter 7 bankruptcy lawyer helps clients understand which assets are exempt from liquidation under federal or state law, thus ensuring that they retain essential property. They also provide guidance on the implications of bankruptcy on credit scores and future financial standing, advising on post-bankruptcy financial management and rebuilding credit.
Do You Need Help From A Chicago Chapter 7 Bankruptcy Lawyer?
The ultimate goal of a Chapter 7 bankruptcy lawyer is to secure a discharge of the client’s dischargeable debts, offering them a fresh financial start. The experienced attorneys from Therman Law Offices, LTD have a thorough understanding of Illinois bankruptcy laws and can help you with the complexities of the liquidation process effectively. With over 35 years of experience, you’re in good hands. Contact us today for a consultation.