A popular appliance store has closed its doors, according to business news sources. Prestige Appliance, based in another state, filed for Chapter 7 bankruptcy on Sept. 7 in a United States Bankruptcy Court. As some Connecticut residents are aware, this move is meant to free the business owners from the constraint of a company’s accrued debt and use its assets to pay down creditors.
Prestige opened back in 2009, focusing on the service and sale of major appliance brands. The business model did not put the company in direct competition with big box retailers, but regardless, both of its locations (one of which opened only last year) have now closed down. It is unclear how much notice employees and customers were given before owners made this move.
The company has retained bankruptcy support, and will begin the process of liquidating company assets. A trustee is assigned by the Bankruptcy Court to oversee this liquidation, determining which assets are to be liquidated and which are exempt from the process. This will also include a general estimation of the value of each physical and intellectual asset that can be exchanged for funding to pay down existing creditors.
To some Connecticut residents, Chapter 7 bankruptcy might seem an ignominious end to a business venture. Often, the opposite is true. A successful bankruptcy filing can address looming, sometimes insurmountable debt, and use existing assets to reduce or remove that debt altogether. Debt that cannot be repaid typically results in a formal discharge granted by the court. In this way, business owners are free to re-enter the market to take advantage of future business opportunities in a more financially stable situation.
Source: aikenstandard.com, “Prestige Appliance files for Chapter 7 Bankruptcy“, Christina Cleveland, Sept. 14, 2017