People in Pennsylvania may enjoy a night out at the theater -- an opportunity to enjoy creative entertainment while supporting the arts. However, one long-time theater in a different state has filed for Chapter 7 bankruptcy due to being unable to continue on. Chapter 7 bankruptcy is a helpful solution for discharging debts that have become too large to handle.
This theater in a different state that recently filed for bankruptcy had been in existence for 34 years. During its operation, it hosted thousands of shows, but now the curtain is staying down. The theater company said it is shutting down its operations because it is cash-strapped.
According to the company’s trustees, the theater was initially reluctant to file for bankruptcy. However, it had no other choice after struggling for so long to remain afloat financially. The trustee board did consider a fundraising campaign in order to raise emergency funds, but it determined that the theater’s financial situation was too dire to resolve. The amount of debt it had in total was nearly $3 million; however, the real problem involved cash flow, officials said. The theater, which was created in 1980, presented seven musicals, classics, comedies and dramas each year.
If a company in Pennsylvania cannot afford to stay in existence because its liabilities outweigh its assets, the company’s assets can be marshalled and sold as part of a Chapter 7 bankruptcy filing. Then, the proceeds of the sale will go to pay creditors, with remaining unsecured debt being formally discharged. Closing down a business can help the business owner to embrace a new start by looking at other business opportunities that may prove more profitable in the future.
Source: The Island Packet, "San Jose Rep shuts down, files for bankruptcy", , June 12, 2014