Tag Archives: Chapter 11 bankruptcy

Bankrupt Swift Air LLC Ditches Phoenix Suns and Other NBA and NHL Teams

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Phoenix-based charter air service Swift Air LLC, which specializes in transporting professional sports teams, filed for Chapter 11 bankruptcy protection in June, 2012, due to ongoing financial difficulties. However, Swift continues to operate its charter air service, and, up until now, has honored all of its transportation contracts.

According to the Tennessean, however, an Arizona federal bankruptcy judge ruled earlier this week that Swift could reject certain contracts with professional sports teams as part of its corporate reorganization plan. Swift alleged in court documents that it wished to focus on providing charter air service to sports teams located only in the eastern half of the country. As a result, Swift summarily rejected its contracts with a pair of NHL teams, i.e. the Colorado Avalanche and the Nashville Predators, only weeks before their season is scheduled to start, and despite its five-year-contract with the Predators that launched in 2011. Likewise, Swift rejected contracts with two NBA teams, the Phoenix Suns and the Denver Nuggets, in favor of contracts with the Boston Bruins, Chicago Blackhawks, St. Louis Blues, Boston Celtics, and Milwaukee Bucks.

Like many businesses offering luxury services, even to high-paid professional athletes, Swift apparently has suffered as a result of the recession and an increasingly competitive market. As a result, it has chosen to narrow its demographic focus in an attempt to salvage the business and restructure its debts. If Swift is able to do so through the Chapter 11 bankruptcy process, it will be able to begin operating at a profit while still paying down debt and avoiding incurring further debts that might lead to additional financial problems.

If your business has become overwhelmed by debt, harassed by creditors, and is losing profits on a daily basis, you may need the restructuring and debt relief that Chapter 11 bankruptcy relief can offer. Only a qualified business bankruptcy lawyer in Arizona may be able to help. Contact our office today, and see what options for financial relief we can offer your business.

Can an individual file for Chapter 11 Bankruptcy?

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Chapter 11 Bankruptcy, also known as a reorganization, is often used by corporations to stay in business while mapping out a plan to pay back creditors. But this chapter is not only used by large companies to file bankruptcy. Individuals can also file under Chapter 11.

If you are a partnership or a sole proprietor, you have the ability to file bankruptcy under Chapter 11. In some cases, qualified creditors may file Chapter 11 against you, in what is called an involuntary filing. While a corporation exists as separate from its stockholders and a stockholder’s personal property is not at risk in bankruptcy, things aren’t as clean and neat for partnerships or sole proprietorships.

Even if a sole proprietor keeps his or her business finances separate from personal ones, many times it’s almost impossible to keep the business apart from the individual. Legally speaking, the business does not have an identity separate from the individual who runs it, which puts the person’s personal assets at risk during a voluntary or involuntary filing of Chapter 11. All assets may be used in order to pay the person’s debts.

If you are in a partnership, and your partner is about to file or will have a Chapter 11 bankruptcy filed against him or her, you must take steps immediately to file for bankruptcy protection, or your assets will be in danger. As a partner, your personal assets may be used to pay off creditors.

If you are a sole proprietor or partner who is facing bankruptcy, you owe it to yourself and your business to get the best legal representation possible. Contact one of our bankruptcy lawyers today for a consultation regarding your case.

Companies Use Chapter 11 Bankruptcy to Reorganize

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 Large corporations often use bankruptcy protection when restructuring or when faced with significant drops in the economy. On Thursday, well-known Dallas based corporation Reddy Ice filed for Chapter 11 bankruptcy protection with the support of its lenders and creditors. The filing will not affect the day to day business of Reddy Ice, the largest packaged ice producers in the country.

Reddy Ice will use the Chapter 11 filing as an opportunity to recover from a $33.3 million loss this quarter and to shoulder an increase in production costs. The Chapter 11 claim will also secure the company’s footing in negotiations in a buy-out of one of its top competitors. A press release cites three significant factors in the decision to file the Chapter 11 in the United States Bankruptcy Court for the Northern District of Texas. The company faces heavy debts, higher commodity costs, and a weak economy.

The Chapter 11 filing is a “Voluntary Plan of Reorganization.” These types of claims allow businesses to receive the automatic stay, which gives businesses the time and protection they may need to restructure when faced with uncertain economic factors, including those outside of the company’s control. Basically, the Chapter 11 claim includes a list of all debts, incomes, expenses, assets, and liabilities, in addition to a statement of reorganization. However, the details of the claim and how it can be filed will be determined based on the type of business filing the Chapter 11 claim with the bankruptcy court. In cases where corporations file for Chapter 11 bankruptcy, the personal property and assets of shareholders is protected, but businesses with sole proprietors may include these items.

Individuals can also make a Chapter 11 bankruptcy claim and receive the automatic stay. If you are considering a restructuring of your personal finances or your business debts, you may be eligible for bankruptcy protection under this claim in Arizona. Consult with one of our Tucson bankruptcy lawyers to help you navigate bankruptcy claims court.