When a small business in Michigan or elsewhere begins to struggle, there are several stages that owners go through as they come to terms with their financial reality. Many may try to avoid a sober assessment of their financial standing, while others make every effort they can think of to raise the money it takes to keep the business afloat. In some circumstances, however, no effort will be sufficient to close the gap between income and expenses, and the only choice that makes financial sense may be for the owners to cease operation and file for personal bankruptcy.
One business owner was recently profiled with a focus on his family's decision to file bankruptcy. The family owned a tannery that has been in business for over 100 years and is unique in that it was the only facility at which a hunter could bring in an animal hide and have it made into a custom piece for that hunter. The man and his wife bought the tannery in 2006 from the family that originally opened it.
When a flood caused damage in 2010, the owners lost orders valued at somewhere between $250,000 and $300,000. Because their products are each unique and specific to each individual customer, this type of loss would understandably be difficult to overcome. The family hired a relative to help with the business, but he had an accident and was paralyzed. When it came down to the point where the owners couldn't cover their expenses and payroll, the decision to shut the doors and file for personal bankruptcy was clear.
The owner is certain that the 1,400 hunters who have hides with the now-defunct tannery will receive their property eventually. While the decision to file for personal bankruptcy is never easy for Michigan consumers or those in other areas of the nation, in this case it appears to have been the most financially feasible option. The bankruptcy will likely discharge a significant portion of the couple's debt, giving them the chance to start anew. The avid hunter was distressed to have to close the business, but has taken a new job and hopes to breathe easier once the overwhelming debt is resolved.
Source: StarTribune, "Unique Owatonna tannery closes," Doug Smith, Sept. 23, 2012