• 26
  • January
    2012

In December, we reported on the evolution of the Nebraska Book Company bankruptcy. The Lincoln-based company, which filed for Chapter 11 protection last June, has recently announced that as a part of its reorganization plan, it will close seven bookstores across the country. The stores will operate for about a month into the semester to capture additional revenue, then shut down. The Nebraska Bookstore will remain open, however.

The progression of the Nebraska Book bankruptcy highlights the benefits and purpose of the bankruptcy system. Nebraska Book filed for Chapter 11, which is designed to help businesses that cannot pay their debts. The aim is to restructure businesses and their debt obligations so that they can emerge stronger, leaner and more competitive. Part of the Chapter 11 process gives a business the ability to reject some contracts, including leases, if certain conditions are met. This ability allowed Nebraska Book to trim costs by closing seven stores.

Of course, individuals also find themselves in financial difficulties. The Bankruptcy Code provides an analogous structure for those individuals. Generally speaking, there are two bankruptcy options, Chapter 13 and Chapter 7. Each has different ways to resolve debt issues and you may have to pass certain tests to enter one or the other.

It is important to remember that while bankruptcy has consequences, it also provides a great number of benefits to those who qualify for its protection. The bankruptcy process offers the chance to establish steady financial footing and relieve the imminent pressure of mounting debt. Bankruptcy is a complicated process and individuals considering filing should consult with an attorney to discuss their options.

Source: Daily Nebraskan, "Nebraska bookstore to remain on campus despite Nebraska Book Company bankruptcy," Frannie Sprouls, Jan. 26, 2012.