Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 11 Bankruptcy?”
Quiznos is back and ready to take on the lunchtime hordes, sans about $400 million in debt after emerging from Ch. 11 bankruptcy. The bankruptcy, the company said, provided an opportunity for it to revitalize its brand.
The United States was founded, quite literally, by people buried in debt who were looking for a fresh start. James Oglethorpe, for instance, founded the colony of Georgia in 1732 as a debtors’ refuge, or as an alternative to going to debtors’ prison in merry-old England.
Anyone who has read Charles Dickens knows all about debtors’ prisons. When he was a boy, Dickens went to work at hard labor to help pay off family debts. His father was imprisoned as a result of mounting debts. Dickens hilariously portrayed the plight of debtors, debtors’ prisons and families toiling under the weight of insurmountable debt in the characters of Wilkins and Emma Micawber in his novel David Copperfield.
Micawber is an ideas man – quick at a word, a drink and a laugh but slow on results and short of change. He’s just the sort of man for debtors’ prison. His family actually joins him in prison, and as Dickens portrays it, they make out better in prison than on the outside.
The State of New York outlawed debtors’ prisons in 1831, and the other states followed suit, so debtors’ prisons never became as prevalent in America as in Europe. America also distinguished itself from Europe by writing the concept of bankruptcy into its founding document: the Constitution. Article I, Section 8, Clause 4 of the Constitution gave Congress the power to establish a uniform set of bankruptcy laws. Congress did just that, creating the Bankruptcy Code.
Perhaps the stigma associated with going “belly up” financially is a holdover, a kind of emotional memory built into our human code. But as James Oglethorpe or James Madison or George Washington himself would tell you, there is nothing morally wrong with going bankrupt. In fact, people and companies do it every day.
On July 1, Quiznos announced that it had emerged from bankruptcy. Why did the sandwich chain enter bankruptcy? It did so, the company said, to reduce its debt and make a fresh start. That is just what the founders had in mind. With bankruptcy, debtors in the United States have the opportunity to do what the founders and their forbearers had done coming to the New World in the first place: make a fresh go of it.
Not all bankruptcies are the same, and if you, your business or someone you know is considering entering bankruptcy, call me today to set up an appointment, so we can sit down and develop an action plan that best fits your unique needs.
Arnold & Smith, PLLC is a Charlotte based criminal defense, traffic violation defense and civil litigation law firm servicing Charlotte and the surrounding area. If you or someone you know need legal assistance, please contact Arnold & Smith, PLLC today at (704) 370-2828 or find additional resources here.
About the Author
Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.
Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.
In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.
American bankruptcy history: http://www.businessinsider.com/us-history-of-favoring-traders-2013-1
Is bankruptcy moral? http://www.idbankruptcylaw.com/Practice-Areas/Is-Bankruptcy-Morally-Wrong.shtml
Bankruptcy and the Constitution: http://www.heritage.org/constitution/#!/articles/1/essays/41/bankruptcy-clause
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