Q: Does location matter when a business undergoes chapter 7 bankruptcy?
Hypothetically, if a privately owned business undergoes a chapter 7 bakruptcy and a franchised version of the same business opens in the same exact location aa the bankrupt entity, does it make any difference for the people seeking relief? How does this work? Is there a limit to how long the franchised business can stay in the location?
A: I strongly recommend consulting with an attorney. If I am understanding your question, it sounds like one business closes and the same business starts up allegedly as a new entity. If assets, ownership, etc. are the same as the new entity, and creditors impacted by the bankruptcy realize this, they may have the ability to pursue the new entity for payment as a successor business. The second entity could be considered the same company, just under a new "banner." It may open up the new entity to lawsuits and creditors seeking payment. There may be proper ways to accomplish this to minimize or eliminate the possible negative effect.
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