Charlotte Bankruptcy Lawyer Bryan Stone of Arnold & Smith, PLLC answers the question “What is Chapter 11 Bankruptcy?”
A recent article by CNN dug into Donald Trump’s business background, an attempt to clear up some confusion surrounding his record. Trump is known for bragging about his business acumen, reminding anyone who asks that he has a net worth in the billions of dollars. Though this may be true, it’s also true that in the past 30 years, no other major corporation has filed for Chapter 11 more than Trump’s companies have.
Though Trump is insistent that none of the bankruptcies were personal, the records reveal that Trump’s casino business filed for Chapter 11 bankruptcy protection four times in the past three decades. Chapter 11 exists to allow a company to restructure, keeping the business afloat and open while allowing it to ditch mounting debt.
Another common statement by Trump is that what he’s done is no different than many other wealthy and successful business owners. While it’s true that myriad successful business owners have filed for bankruptcy, it is not quite as common as The Donald might like people to believe. CNN says that in the past 30 years, less than 20 percent of public companies with assets of more than $1 billion have filed for bankruptcy. And none as many times as Trump.
The first of Trump’s bankruptcies occurred in 1991, and involved the Trump Taj Mahal. Trump gave up a lot personally in the bankruptcy, handing over a giant yacht and even an airline. It wasn’t enough though, as Trump filed again in 1992, a case that resulted in his losing control over the Trump Plaza Hotel in New York. The third time wasn’t the charm for Trump, as his company again filed for bankruptcy in 2004, this time involving more casinos in Atlantic City and a riverboat in Indiana. The most recent filing happened in 2009, when his company missed a $50 million payment to creditors. Though his name remains on the Atlantic City casinos, he no longer has any ownership stake in the company, lost as a result of the Chapter 11.
Are there limits?
Though trump appears to have claimed the most corporate bankruptcies in the past 30 years with his four filings, it begs the question, are there limits? The short and sweet answer is: No. There are no limits on the number of bankruptcy cases a person is allowed to file. That being said, there are time limits that must be abided between filings, requiring debtors to wait a certain period of time before debt can be discharged again. For instance, someone who received a discharge under a Chapter 7 would have to wait another eight years before filing another Chapter 7. Interestingly, the same person could for Chapter 13 bankruptcy protection only four years after the initial Chapter 7.
Beyond the time limits that apply once someone has received a successful bankruptcy discharge, there are also limits that apply just to the filing. These limits exist to prevent possible abuse of the bankruptcy system, so that someone cannot file multiple cases back to back in an attempt to stall and frustrate creditors. The rule says that if your bankruptcy case was dismissed with prejudice then you will need to wait at least 180 days before re-filing.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.
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.
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