Multiple debt relief solutions are available for financially troubled individuals and businesses in New York. Bankruptcy courts offer debtors a fresh financial start through liquidation of assets or debt reorganization. An automatic stay issued by a bankruptcy court brings a halt, at least temporarily, to any form of debt collection.
A trio of brothers from Albania successfully propelled Famous Famiglia into a chain of 100 pizza restaurants around the globe. One brother chose to try his hand at a new establishment in 2010, Valentino's on the Green in Queens. Valentino's closed after two years and a $5 million investment.
An investor who sunk $1 million into the restaurant's holding company, Friendship Restaurant Group, recently won a judgment against his former partner. The New York Post reported the investor accused Valentino's co-owner of overselling shares and diluting a 50 percent stake to just 12 percent through fraudulent practices. Flushing Savings also filed suit against the former owner of Valentino's for defaulting on a $1.2 million loan.
The investor and the bank aren't the only ones with unpaid bills attached to Valentino's. The restaurant also owes more than $437,000 in back rent.
The man named in the lawsuits recently filed for Chapter 7 bankruptcy, which allows a person or business's assets to be liquidated to pay creditors. Pending lawsuits are suspended during bankruptcy proceedings.
Debt can be discharged during bankruptcy, but courts also look for ways to let creditors recoup at least some losses. Chapter 7 achieves this goal through liquidation, while other forms of bankruptcy allow debt to be restructured and paid back over time.
A bankruptcy attorney can review the legal options, which may or may not require a bankruptcy filing. It's important to understand the pros and cons of filing for Chapter 7 or some other type of bankruptcy before you decide which course is right for you or your business.
Source: The New York Post, "Famous Famiglia pizza mogul files for bankruptcy after failed venture," Lisa Fickenscher, June 26, 2015