When considering filing for bankruptcy protection, there are several options for those individuals who have personal debt, own a struggling business or have put up personal assets as collateral for business loans. Chapter 7 is available to individuals and business and involves liquidating assets while Chapter 13 for individuals and Chapter 11 for businesses help debtors restructure the debt that they owe.
The owners of a Miami hotel filed for bankruptcy last week. The bankruptcy filing was made under Chapter 11 of the bankruptcy code in order to keep the business operational.
The Florida residents own the El Palacio Miami Sports Hotel which is located near the Calder Race Course in Miami Gardens. The couple purchased the hotel in 2004 when it was formerly a Holiday Inn. The purchase price was $4.6 million. The couple was also involved in several other real estate deals in Miami prior to the collapse of the Miami real estate market.
According to court papers, the Tamarac couple listed between $10 million and $50 million in assets and between $10 million and $50 million in debts. The couple, however, did just extend the mortgage on the hotel using their Tamarac home as collateral.
Florida small business owners and individuals who have acquired substantial debt should seek the help of an experienced bankruptcy attorney who can guide them through the complexities of bankruptcy. Determining what form of bankruptcy is most appropriate will depend upon many factors and the surrounding circumstances of each individual’s situation and financial goals.
Source: South Florida Business Journal, “El Palacio hotel owners file personal Chapter 11,” Paul Brinkmann, 22 July 2011
