Many Long Island residents were saddened by the news last fall that the Organic Avenue chain of juice shops was apparently going out of business. The widely-recognized brand had been in business for 15 years.
Recently, competition from restaurants, juice bars in gyms and even coffee shops dealt Organic Avenue a number of setbacks in 2015. The chain announced major layoffs and was eventually acquired by a private equity firm. In October, it announced it was filing for Chapter 7 bankruptcy and intended to close all of its locations.
Chapter 7 bankruptcy is also known as liquidation bankruptcy. Filing for Chapter 7 bankruptcy is usually among the final steps a business takes as it winds down operations for good. All of the business’s assets will generally be sold off and the proceeds applied towards its debt. It does, however, offer the owner or owners the prospect of a fresh financial start once the process is complete and remaining debt discharged.
In some cases, Chapter 7 bankruptcy may turn out not to be the end of the business after all. A number of parties expressed interest in Organic Avenue during its auction. Due in part to the valuable leases it held in Manhattan as well as its brand recognition, the investment firm that finally bought Organic Avenue’s assets has announced plans to reopen eight shops before the end of the year.
Long Island businessmen and women may be wary of Chapter 7 bankruptcy. Our businesses are like our dreams that we long to see succeed. But when faced with overwhelming debt, Chapter 7 can sometimes offer a fresh financial start in more ways than one.
Source: Crain’s New York Business, Bankrupt juice chain Organic Avenue to be rejuvenated,” Aaron Elstein, Dec. 8, 2015