TechShop, a membership-based communal workspace for artists, designers, and tinkerers with locations across the United States and abroad, abruptly closed its doors in November of 2017. Along with this closure came an announcement that the company filed for Chapter 7 bankruptcy. All locations in the United States closed, while those outside the country remain in operation.
TechShop operated from 2006 to 2017. Recently, in an effort to remain financially solvent, it moved away from opening and operating its own makerspaces to focus on helping universities and nonprofits launch their own makerspaces. A makerspace is a large, open area outfitted with work benches, tools, and other equipment to design and build objects. For individuals who do not have the space or money to purchase and store this large equipment for themselves, makerspaces make it possible to access this type of equipment. They also offer safety courses and in some cases, educational seminars where members can learn about different equipment and techniques.
Chapter 7 Bankruptcy for Businesses
Generally, Chapter 7 bankruptcy is seen as an option for individuals facing substantial levels of personal debt. Businesses can use this chapter as well, though it is less common. Usually when a business files for bankruptcy, it files for Chapter 11 bankruptcy. Chapter 11 is also known as reorganization bankruptcy because it provides a way for companies struggling with debt to rework their operational structures and discharge debt in order to become profitable again.
Chapter 7 bankruptcy is for companies that have no plan to become profitable again. Like personal Chapter 7 cases, Chapter 7 for a business means liquidating any assets that can be liquidated to repay the company’s creditors. Unlike a personal Chapter 7 bankruptcy case, there are no exemptions in a business Chapter 7 case – all of the company’s assets are liquidated to repay its debts.
For a business owner looking to move past high levels of debt, Chapter 7 makes it easy to close up shop and let the bankruptcy trustee handle everything related to the liquidation and repayment of the business’ debts. If a business owner wants to sell the company to a third party, though, Chapter 7 is not the ideal solution. Filing for Chapter 7 bankruptcy means the business’ assets become the bankruptcy trustee’s property and the owner can no longer operate the business in any way. Additionally, if the owner is personally liable for certain business debts, he or she may be required to repay those debts as part of the bankruptcy.
Work with an Experienced Chicago Bankruptcy Attorney
Whether you are facing personal debt or business debt will steer you toward one chapter of bankruptcy or another. To determine which chapter is best for your bankruptcy case, contact our team of experienced Chicago bankruptcy attorneys at Newland & Newland, LLP today to schedule your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Christopher Burns)