New Jersey ice cream connoisseurs may be dismayed to learn that the Arkansas-based Yarnell’s Ice Cream Company recently filed for Chapter 7 bankruptcy. Yarnell’s is known for its popular frozen desserts. They submitted Chapter 7 paperwork in late August.
Alas, the company may be revived if an investor chooses to breathe life back into the operation. As such, Chapter 7 bankruptcy protection has proven a savvy choice on the part of Yarnell’s owners.
The bankruptcy filing spanned 178 pages and was turned into the U.S. Bankruptcy Court, listing assets of $8 million and liabilities of $15.7 million. The filing comes on the heels of an abrupt closure that took place on June 30. A portion of the debt the company owes goes to employees who were left unpaid when operations came to a sudden halt. All in all, about 200 people were left jobless. One former employee has filed a lawsuit against the company because no notice was given (the Adjustment and Retraining Notification Act requires a 60 day notice) before the plant shut down.
Now, company administrators wait as offers come in for the purchase of the business. Nonetheless, Chapter 7 bankruptcy protection has proven to be the best option, given that the company currently owes $4 million to the state, $1.9 million to the Arkansas Economic Development Commission and $2.1 million to the Arkansas Development Finance Authority. Company execs are currently working with the bankruptcy trustees to reach an expedient resolve.
Yarnell’s closure is proof positive that the economy has affected people all over the United States, not just here in New Jersey. However, the choice to file for Chapter 7 bankruptcy may prove the company’s salvation. Businesses facing financial hardship during these tough economic times may find benefit in learning more about the many advantages of bankruptcy protection for debt relief.
Source: The CNBC, “Searcy-based Yarnell’s Ice Cream files bankruptcy,” Aug. 29, 2011