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Chapter 7 bankruptcy filed by dry cleaning company

The parent company of a popular chain of dry cleaning locations in a northern state has filed for bankruptcy, leading to the closure of all chain locations. Sort LLC filed for Chapter 7 bankruptcy in January, citing unmanageable debt, which has necessitated the closure of Zoots dry cleaners across the company's home state. As some Kentucky business owners can attest, this may have been the most responsible financial move the parent company could make in this situation. 

It was not made clear in the public report exactly how much debt Sort LLC was facing when the decision was made to file for bankruptcy. However, debt can often accrue for companies suffering from smaller sales margins. Thankfully, a bankruptcy trustee has already been assigned to this case by the local bankruptcy court, and this trustee will work with the company to facilitate the closure of all affected locations. 

In some cases, these locations are still in possession of customer clothing, an issue that is currently being remedied with the help of the trustee. Customers have been informed that their garments should be returned within a week of the filing. In the meantime, the trustee will work to appraise existing assets and debts to determine the best course of action moving forward to pay down creditors. 

Chapter 7 bankruptcy can mean the difference between crushing debt and a second chance at business ownership. Some Kentucky residents already understand how difficult it can be to run a business in the red, which is why bankruptcy can be such a vital step in the process of re-entering the market. With debts paid down and/or forgiven by the court, company ownership can reassert financial stability in their next venture. 

Source: thenewstribune.com, "Cleaner declares bankruptcy, clothes still in company hands", Jan. 22, 2018

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