Case Study: Dennis’s Farming Business – Resolving Long-term Bankruptcy Issues

The Situation:

Dennis, an elderly client, was involved in a generational farming business with other family members. Due to marital discord, the family had to buy back shares from an ex-partner, Sue, with personal guarantees from each family member.

The Challenges:

• Family’s farming company put into liquidation by Sue
• Personal bankruptcy of each family member who provided guarantees
• Dennis’s failure to acknowledge the bankruptcy for over 9 years
• Need to make a release application despite ability to pay off debt through family-owned land

LemonAide’s Approach:

• Assessed Dennis’s overall financial situation
• Explained the consequences of not acknowledging bankruptcy
• Guided Dennis through the process of properly acknowledging his bankruptcy
• Assisted in preparing for a release application

The Outcome:

• Dennis properly acknowledged his bankruptcy status
• Prepared for a release application to resolve the long-standing bankruptcy
• Educated Dennis on the importance of lodging bankruptcy documents promptly
• Provided a path forward to resolve the financial and legal issues

Key Takeaways:

• Personal guarantees in family businesses can lead to complex financial issues
• Ignoring bankruptcy does not make it go away and can prolong the process
• Proper acknowledgment and compliance with bankruptcy procedures is crucial
• Professional guidance can help navigate even long-standing bankruptcy issues

Struggling with long-term bankruptcy issues?