Redwood City Bankruptcy Attorney Discusses Bankruptcy Court Says Furnishing Company Your Home Resort Must Liquidate Its Assets
Redwood City Bankruptcy Attorney Discusses Bankruptcy Court Says Furnishing Company Your Home Resort Must Liquidate Its Assets
A bankruptcy judge in the U.S. District Court in Sacramento, California, is ordering Your Home Resort, an outdoor furnishing store, to convert to Chapter 7 bankruptcy and sell its assets to pay its creditors. The company was responsible for its customers' loss of thousands of dollars last year when it abruptly shut down its showrooms in Rancho Cordova and Rocklin.
Your Home Resort owes creditors approximately $3.5 million ($2.3 million of this is owed to unsecured creditors—customers that either paid deposits for outdoor furniture or paid for them in full but never received their orders.) Unsecured creditors, however, are generally paid after secured creditors, such as credit card companies and banks, in bankruptcy proceedings. Your Home Resort owes money to about 12 secured creditors.
An auction date has yet to be set. The outdoor furnishing store had sold barbecue islands, gazebos, hot tubs, and other outdoor furniture to customers.
The company had originally filed for Chapter 11 bankruptcy last August in an attempt to stay in business while reorganizing its operation.
An involuntary bankruptcy petition may be filed (1) Where there are twelve or more creditors, then three or more creditors who are owed a minimum amount of $10,775 are required to file; or (2) if there are fewer than twelve claimants, then any one or more creditors with claims totaling at least $10,775 may file the petition. Farmers and nonprofit corporations are exempted from an involuntary filing. The court, after notice and hearing for cause, may require creditors filing an involuntary petition to post a bond to indemnify the debtor for damages in the event of a dismissal of the involuntary petition.
Priority of distribution of payment to creditors. Secured creditors are paid first.
In descending order, the following unsecured creditors are entitled to the expenses and claims:
1. Administrative expenses incurred by the trustee
2. Post-petition credit extended to debtors
3. Claims up to $4,300 for wages, salaries, or commissions earned by an individual within ninety days of filing of the petition
4. Claims for contributions to employee benefit plans up to $4,300 for services rendered up to 180 days before filing of petition
5. Claims up to $4,300 for a person operating a grain storage or fish produce storage or processing facility
6. Claims by consumers up to $1,950 for deposits made for purchase, lease, or rental of property or for the purchase or consumer goods or services
7. Claims for alimony, maintenance, or child support
8. Income and other taxes due to governmental units
9. The remaining unsecured creditors
Sagaria Law, P.C. represents clients in Alameda County, Monterey County, and Santa Clara County that would like to file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy protection. To schedule a free consultation, contact Sagaria Law, P.C. today.
Bankruptcy, Answers.com
