A prominent oil company has closed its doors, according to local business reports. Michigan residents who follow the oil business may already be aware that Wayne Fuel has filed for Chapter 7 bankruptcy early in October. The company, which was incorporated back in 1992, has already shuttered its doors and is currently undergoing the bankruptcy process in a state bankruptcy court.
The company made the difficult decision to file for bankruptcy after performing an assessment of their assets and liabilities. While their assets totalled a respectable $100,000-$500,000, their liabilities were considerably higher, totalling somewhere between $500,000 and $1 million. The CEO of the corporation filed personally on behalf of his company.
Thankfully, the Chapter 7 filing will allow the company's owners to discharge or otherwise excuse a portion of their debt. The primary function of a Chapter 7 is to protect the personal assets of owners and shareholders in the event the company is unable to satisfy its debts by liquidating all company assets to pay off existing debt. In some cases, other types of debt can be excused in a bankruptcy scenario. It is hoped this move will allow the company's owners to move forward without being pulled under by their company's balances owing.
It is unfair for Michigan business owners to think of a Chapter 7 filing as a failure to conduct good business, particularly in these extraordinarily difficult economic times. Indeed, a bankruptcy filing can often be the smartest move for a struggling business. The discharging of existing debt allows business owners more flexibility in getting a new business off the ground without being indebted to the past.
Source: citizensvoice.com, Wayne Fuel files for bankruptcy, No author, Oct. 5, 2013