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New Jersey diner closes doors with Chapter 7 bankruptcy

The residents of Williamstown Township in New Jersey are mourning the closure of a diner that was part of their lives for decades. The doors closed recently after a federal bankruptcy court converted the company's Chapter 11 bankruptcy to Chapter 7 and ordered it to close. This will lead to liquidation of assets.

The diner opened in 1942 as a small truck stop, but it grew over time and became a landmark in the area. The original family sold it in the 1980s, and the current owners purchased the business -- with more than 2 acres -- for $2.13 million in 2005. The new owners added a sports bar about 10 years ago, but filed for Chapter 11 relief in May 2015. 

At that time the diner's assets were declared to be below $50,000, with liabilities between $1 million and $10 million. Times became even more difficult, and when the company's financial reports for April 2016 were filed with the court, they revealed that, with sales of $232,000 that month, the net cash flow was only $19,000. At this time the court ordered immediate closure. The diner's owners listed the business for sale, and although two parties showed interest, it is not known what the fate of this New Jersey landmark will be.

Business bankruptcies can be extremely complicated, and it is not uncommon for a Chapter 11 bankruptcy to be converted to Chapter 7. If no success is achieved with restructuring the business under Chapter 11, liquidation may be the next step. An experienced bankruptcy attorney is likely the best person to guide and support a business owner while navigating a bankruptcy filing.

Source: philly.com, "Geets, a 'Williamstown staple,' closes", Erin Serpico, Michael Klein, Aug. 4, 2016

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