According to the Arizona Republic, Daniel Hendon, the owner of Danny’s Car Wash filed for personal bankruptcy under Chapter 11. The article cites a number factors that business owners commonly face when choosing whether to file a personal Chapter 11 bankruptcy:
- Personal guarantees of business debts
- Pending lawsuits, in this case including at least one which claims personal liability on business debts that are not personally guaranteed (listed as the “piercing corporate veil allegation”)
- Significant secured and unsecured debt
A Chapter 11 bankruptcy case provides a single forum in which these issues can be addressed and a payment plan can be proposed.
Of note, the article also reports that Mr. Hendon has a positive net worth. As previously discussed, a debtor need not be insolvent to file bankruptcy.
If you are a business owner facing these or similar challenges, you should consult with an attorney who handles Chapter 11 cases to determine whether a Chapter 11 bankruptcy makes sense for your situation. For a free consultation, call (480) 719-1152.