The Money Tree Inc., Files For Chapter 11

Business Money doesnt really grow on trees, it seems. The Money Tree Inc., a small consumer loan provider filed for bankruptcy protection in Alabama last week. The Georgia-based .pany was left with no other options, as the economy left many of their customers (debtors) unable to pay back their loans. Filing for Chapter 11 will allow The Money Tree and its subsidiaries to restructure their business, while closing almost half of their 92 locations in the Southeast. The .pany has been trying to restructure since October to avoid filing for bankruptcy, but bankruptcy will offer them protection from their creditors while they sort merge offices, reduce overhead and eliminate debt. The filing listed $71 million in debts. The .pany hopes to enhance their short-term liquidity while trying to recession-proof their business for future lending. The Money Tree is facing the same problem many businesses are; when their debtors .e short on repaying their debts, the domino effect can turn a few missed payments or defaults into a string of bankruptcies. The Lending Tree would lend small loans to people to pay for rent, groceries and other necessary living expenses. In a recession, when people have mortgages and medical expenses to pay, consumer loans often go into default. The failure of their customers to pay back loans in addition to increased government regulations and investor redemptions put The Money Tree under too much financial pressure. The Money Tree was founded in 1987 in Georgia and expanded into Alabama, Florida and Lousiana by the 1990s. The .pany said that the economic downturn as well as Hurricane Katrina had a significant impact on their lending ability. The .pany has 28 Georgia locations, including a branch in Buford, Conyers and Forest Park. Bradley Bellville, president of The Lending Tree said in the filing that We have done everything possible to try and protect the integrity of our investors and the .pany. If anyone wants to protect their investors, it would definitely be a lending institution, as they understand the importance of security. The Lending Tree has every intention of restructuring its debt to remain in business. Their cost-cutting measures include merging of its profitable branches from 92 to 46 branches. One of the .panys subsidiaries, which is not a party to the bankruptcy filing is Best Buy Autos of Bainbridge Inc. They intend to operate business as ordinary. For more bankruptcy news and information visit our Rio Grande Valley bankruptcy lawyer blog at Davis Law. About the Author: 相关的主题文章: