Bankruptcy of Restaurants and Bars
The bankruptcy of restaurants is the classic Chapter 11 - or Chapter 7 if the business cannot be saved.
The most important thing for restaurant and bar owners to do is to answer a hard question early on. That question is this, "Is there something that I can change that will really result in a significant increase in gross revenue?" If the answer to that question is "no" then you could not close too quickly. One does not have to carry a failing restaurant very long before learning first hand how much money that restaurant has to make before breaking even.
Ask questions like these, "Do I already have enough income to carry the business but is old unsecured debt that is the primary problem?" or "Have I been the victim theft? How would I know it if I am?" or "Are they really going to put in a new access lane and when?"
If you had the time to make the changes that you need to make to increase cash flow, and if you know what they are, could you do it? If the answer to that question is "yes" then you should consider a Chapter 11.
The important thing to the restaurateur is to ask this question every day and answer it early.
What are some warning signs? Delinquent employment taxes, or sales taxes and warnings from TABC.