Sudden, unexpected, and steep costs can be highly detrimental to any type of business. When this happens, the business could be put into serious financial jeopardy. Many times this will cause a business in Texas or elsewhere to file for bankruptcy protection. This is what happened to Summer and Winter Construction LLC, which filed for Chapter 7 bankruptcy after receiving stiff fines from a local court judge and a federal appeals court judge.
The construction company was fined by a local court judge $18,000 in February for mishandling asbestos. These fines stemmed from improper disposal of asbestos from two homes in 2005 and 2006. In June, a federal appeals court judge ordered the company to pay $102,000 in fines levied by the Occupational Safety and Health Administration against a predecessor company, Sharon and Walter Construction. This amount originates from 16 citations for problems at work sites in 2000 and 2009.
The bankruptcy petition listed the company's liabilities as ranging anywhere from $100,001 to $500,000. This includes amounts owed to the Internal Revenue Service. The company reported less than $50,000 in assets. This initial petition did not include the detailed lists of assets and debts that are required by law in bankruptcy filings. However, the company's attorney says they plan to complete the petition by the mid-August deadline.
A Chapter 7 bankruptcy is one of the simplest forms of bankruptcy. This type of bankruptcy in Texas and elsewhere provides for the liquidation of available assets to pay creditors, after which a discharge is typically granted. What type of bankruptcy one chooses to file depends on the individual situation. Here, the company has apparently made the decision to liquidate everything in an attempt to address its financial obligations and move forward to other business opportunities.
Source: Concord Monitor, "Building firm hit with fines files Chapter 7," Ben Leubsdorf, Aug. 8, 2012