It
is figuratively true that the words “interesting” and
“bankruptcy” should never be used in one sentence, but to
research about bankruptcy is to discover facts too interesting for
the subject. Do not be afraid. Not all articles on bankruptcy are
“constitution-esque” articles.
To
start with, can you imagine how the first banks in history look like?
Banking was held in public places, such as markets and fairs.
Transactions were made over wooden benches. That’s right. Coins and
important papers were exchanged over a wooden bench where everyone in
that public place could see.
In
Italy, it was a common practice to break a bank’s wooden bench
whenever a bank owner declares that his bank is no longer capable of
operating - primarily, due to financial reasons. Therefore, when
people see a broken bench, where a bank used to be in, it means that
that bank has ceased operating.
The
word “bench”, when translated in Latin, is “bancus”; while
“broken” is translated as “ruptus.” Meanwhile, the Italian
phrase “banco rotto” when translated to English is “broken
bank.” Have you been reading something that sounds like bankrupt?
Yes you are! Hence, the word, “bankruptcy”. In the legal world,
there are laws that guide, or revive a business that is close to
totally sinking. When a business has debt that is way bigger than the
assets, that company should stop borrowing money. Sometimes, it is
even better for that business to announce bankruptcy.
Flash
forward to the twentieth century: Gadi
Leshem is the C.E.O. and president of a company that installs
carpets. He also heads the Ogden River restoration in Utah. He also
is a movie producer and a very close friend to Utah mayor Matthew
Godfrey. Moreover, he is also a realtor at Ogden. He has been buying
real estates at Ogden, a place he said he loved so much.
2009:
Gadi
Leshem filed for Chapter 11 bankruptcy. His carpet installation
company is bankrupt. It only has 1 million in assets and 46 million
in debts. Now that is a good reason for a bench to be broken.
Sometimes, declaring bankruptcy can help revive a sinking business.
Chapter
11 bankruptcy allows the owners of a corporation or a partnership to
come up with a plan for reorganization, to keep the business alive,
and pay debtors over time. Gadi
Leshem is now closing 21 of his 23 facilities. Selling these
assets will generate
$291,966 in revenue, a move that might just mean “life” for his
other, more profitable businesses.
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