It is sometimes easy to assume that certain industries, like advertising, have the unique status of being "recession-proof" but unfortunately that is simply not the case. Illustrating this point is Lipman Operating, LLC, which closed its doors in mid-September and has filed for Chapter 7 bankruptcy. While Michigan business owners may be tempted to view this as a failing on the part of the company, the truth is a Chapter 7 can go a long way towards setting business owners on a stronger fiscal path.
Lipman has been struggling for several months, according to its chief creative officer David Lipman, who has worked to ensure employees of the advertising firm were paid for their work despite flagging finances. Despite his efforts, Lipman was forced to file for Chapter 7 on Sept. 24 following a full tally of their outstanding debt. A Chapter 7 means the company's nonexempt assets will be liquidated to satisfy that debt, a move that in Lipman's case will still leave unsecure creditors without payment.
Lipman has expressed sincere regret to investors and employees that the company which has been in his family for 30 years has not lived up to its obligations. However, he is also looking towards the future and has vowed to help those who were left jobless following the agency shuttering its doors. The opportunity provided by the Chapter 7 filing may yet allow Lipman to rebuild a company on a stronger fiscal foundation.
Chapter 7 filings are difficult to take for business owners, as some Michigan residents understand. However, it is important to think of a bankruptcy filing not as a failure, but as an opportunity to grow and learn. By clearing the slate of existing debt, it allows entrepreneurs to move forward with new knowledge towards a better fiscal future.
Source: wwd.com, David Lipman's Agency in Chapter 7, Vicki M. Young, Oct. 2, 2013