Daily Archives: September 25, 2019

Filed for bankruptcy, or thinking of filing, and wondering how long it'll mess up your credit report?

The short answer is that it depends on which type of bankruptcy you filed.

Although bankruptcy filings stay on your credit report for up to a decade, the effect on your credit score diminishes over time until it drops off your report completely.

Read on for the different types of bankruptcy, how they impact your credit score and report, plus how you can minimize the impact on your credit reports and what you should do in the aftermath.

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Chapter 7 bankruptcy is the classic bankruptcy measure for people who have defaulted (that is, failed to pay) their loans. Filling for Chapter 7 forgives most debts, including:

Chapter 7 bankruptcy stays as a negative mark on your credit report for 10 years (from the date of filing). Filings also could cause your credit score to drop by as much as 200 points or more.

Any debts that were wiped away by filing for Chapter 7 bankruptcy will be included on your credit report.

To qualify for Chapter 7 bankruptcy, you must first pass a means test that assesses your income and assets-to-debt ratio. Often, property, cars and other valuables might have to be liquidated in order to pay back as much of the debt as possible but some day-to-day essentials that you own might be exempt under law, like your house or computers you use for work.

Chapter 7 bankruptcy (unfortunately) doesnt apply to student loans, taxes, criminal fines, alimony or child support. There are some consequences you can't escape.

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Chapter 13 bankruptcy, also known as wage earners bankruptcy, is for people who earn too much to qualify for Chapter 7 but not enough to meet creditors' immediate payment requirements.

As with Chapter 7 bankruptcy, filing for Chapter 13 bankruptcy will torpedo your credit score, and the filing will remain on your credit report for seven years. If you need to apply for another loan during that time, youll need to file a motion and obtain the courts permission first.

Under Chapter 13 bankruptcy, the court creates a payment plan for you to repay your debt over the span of three to five years.

After that span of time, any remaining debts are wiped clean meaning that your creditors may not get the full amount you owe them. Chapter 13 bankruptcy allows you to repay some of your debt while still holding on to your assets, including cars, jewelry and property.

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What's interesting is that there's no minimum amount of time for bankruptcy to stay on a credit report. Ten years is the maximum but you might get a bankruptcy removed sooner. So get a free credit score and credit report and look really closely for mistakes.

If you find any errors with your personal information, debts, creditors, timelines or other information, file a dispute with the credit bureau. Any entries related to your bankruptcy must appear on your credit report correctly, and mistakes could force a credit bureau to remove the bankruptcy from your report.

If you don't find anything, bad news: You're stuck with the bankruptcy on your credit report. The good news? Bankruptcies automatically fall off your credit report after the designated amount of time.

If you notice that a bankruptcy doesn't come off your credit report after the expiration date, you should file a dispute with the credit bureaus.

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Double-check your credit report after your debts are discharged. Make sure that only the accounts that were part of your bankruptcy got reported to the credit bureaus. Any mistakes could ding your credit score even more, so they should quickly be reported. You can start by getting your free credit report and credit score from Experian.

Rebuild your credit with a secured credit card but be sure to be cautious when applying for new credit cards after receiving a discharge, debtors often get offers for new credit cards. If you do opt to sign up for a credit card, look into a secured card as a way for you to slowly rebuild credit.

Budget, budget, budget. Its one thing if you had to declare bankruptcy for an unforeseen emergency like medical bills or unexpected lay-offs those things are beyond your control. If you got into debt due to reckless spending, consider having a hard talk with yourself about your spending habits so you can avoid filing for bankruptcy again in the future.

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There's no shame in needing help managing your debt, but because of the damage to your credit score, bankruptcy should be a last-ditch resort for those whose debts have run wild and peaked over 50% of their annual income.

If you qualify for Chapter 13 bankruptcy, it may be wise to consult with a debt relief agency to figure out if it's the easier road to take.

Be sure to weigh alternative debt relief strategies, such as:

And consider whether you might benefit from using a debt snowball or debt avalanche repayment strategy to keep you on track to go debt-free.

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How Long Will Bankruptcy Haunt Your Credit Reports? - Yahoo Finance

After a disastrous bankruptcy, British-based travel company Thomas Cook's collapse has left 600,000 people stranded across the world.

A Thomas Cook flight attendant said she found out she lost her job via Facebook. One man reported that a Tunisian resort was "holding travelers hostage" until they pay the money it said it was owed by Thomas Cook.

While corporate bankruptcies are often chaotic for employees and executives, the world's worst company collapses have shaken up entire world markets.

Read more: Passengers share vacation disasters from the Thomas Cook collapse, including a ruined $41,000 wedding and 'being held hostage' by angry staff at a Tunisian hotel

Lehman Brothers' collapse helped push the global economy toward the financial crisis. Pan American World Airways' bankruptcy shattered an global symbol of American travel. The Enron scandal showcased the lengths some corporate financers would go to defraud investors.

Earlier collapses like the Medici Bank and the South Sea Company became markers of their eras.

Here are 9 of world's worst corporate downfalls of all time:

Link:

Thomas Cook, Enron, Lehman: The worst company collapses, bankruptcies - Business Insider

The Catholic Diocese of Syracuse says it doesnt anticipate filing bankruptcy in light of an increasing number of lawsuits under New York States expanded Child Victims Act.

The law allows the victims of child sex crimes to pursue legal action not only against their accused attacker but that persons employer or associated agencies even decades after the incident.

The Roman Catholic Diocese of Rochester was the first in New York to seek bankruptcy protection as a result of sexual misconduct lawsuits.

The Associated Press reports all eight dioceses in New York face financial pressure under the expanded law giving victims a year to go ahead with old claims that would not be followed under New Yorks old statutes of limitation.

AP says the Dioceses of Albany, Buffalo, Ogdensburg and Rockville Center said they had not decided on any bankruptcy filing while Syracuse and the Archdiocese of New York both said they didnt anticipate asking for financial protection. The Diocese of Brooklyn flat out said it was not considering bankruptcy.

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Catholic Churches in New York Weigh Bankruptcy Option - wnbf.com

SAN FRANCISCO (Reuters) - The committee for wildfire victims in the bankruptcy of PG&E Corp said in a court filing on Thursday it was prepared to present a $24 billion reorganization plan for the power provider.

The committee, joined by a group of unsecured noteholders, said in the filing in U.S. Bankruptcy Court in San Francisco that the plan would provide for a comprehensive settlement of all claims against PG&E stemming from massive California wildfires in recent years that have been blamed on the companys equipment and that pushed it to seek Chapter 11 bankruptcy protection in January.

San Francisco-based PG&E earlier this month filed an outline of a reorganization plan that would pay $17.9 billion for claims stemming from wildfires, including up to $8.4 billion for individual wildfire victims.

When PG&E filed for bankruptcy, it anticipated wildfire liabilities topping $30 billion.

Our plan of reorganization sets forth a framework to meet PG&Es legal obligations in full while prioritizing victims and customers, the company said responding to the committees filing.

According to the filing, the committees reorganization plan would create a trust to pay wildfire claims that would be funded with $12 billion in cash and $12 billion in shares in a reorganized PG&E.

Investors including bondholders Apollo Capital Management and Elliott Management Corp among others would commit more than $28 billion in new money to PG&E, leaving them with nearly 59% of shares and new debt in the reorganized company, the filing said.

The trust for wildfire claims would control roughly 40% of shares in a reorganized PG&E, the filing added.

Apollo, Elliott and other PG&E bondholders in June proposed a reorganization plan putting up to $31 billion into PG&E, including up to $18 billion to pay pre-bankruptcy wildfire claims.

That plan would have left the bondholders with 85% to 95% of shares in a reorganized PG&E in exchange for a cash contribution of $19 billion to $20 billion. They would also have exchanged unsecured debt for secured debt.

PG&E and several of its large shareholders, including Abrams Capital Management and Anchorage Capital Group among others, opposed the bondholders initial plan.

Thursdays filing also said the committees plan - the third proposed overall - would cover payments for so-called subrogation claims by insurers.

PG&E recently unveiled an $11 billion settlement with insurance companies over payments they made to individuals and businesses with coverage for wildfire damage to property. The insurers had initially pegged their claims at $20 billion.

Reporting by Jim Christie; Editing by Peter Cooney and Christopher Cushing

More here:

Wildfire victims in PG&E bankruptcy to present $24 billion reorganization plan - Reuters

PHILADELPHIA (CBS) The sale of St. Christophers Hospital for Children in Philadelphia has been approved by the U.S. Bankruptcy Court. Drexel University and Tower Health have agreed to acquire St. Christophers Hospital for Children for a reported $50 million.

We are pleased the U.S. Bankruptcy Court has approved the sale of St. Christophers Hospital for Children to an entity formed by Tower Health and Drexel University. The Hospitals acquisition by such highly-regarded local institutions delivers financial stability, operational expertise, and long-term confidence. Hospital management and medical staff are eager to work with the buyer for a smooth transition and are committed to ensuring seamless patient care.

St. Christophers is an important health care provider, and our goal from the beginning has been to preserve uninterrupted access to world-class pediatric care and nationally recognized programs. Though it has been a long process, we have met that goal. We are satisfied this transaction ensures St. Christophers has a healthy future ahead of it.

The auction was prompted by the closing of Hahnemann University Hospital after its parent company filed for bankruptcy in June.

Read more from the original source:

Sale Of St. Christophers Hospital For Children Approved By US Bankruptcy Court - CBS Philly

Yesterday, the worlds oldest holiday firm, Thomas Cook UK (TCG), collapsed. The company is 178 years old. The companys stocks ceased trading on the London stock exchange immediately. The company, which avoided near bankruptcies several times, finally liquidated after it failed to secure a $250 million rescue funding required by its banks.

The firms survived near bankruptcy during the Second World War. In 1948, the British government nationalized Thomas Cook UK by making it a part of British Railways. In 1972, the firm was privatized. However, an ever-increasing debt burden finally took down the firm. The changing trend of booking holidays on the internet also contributed.

BBC News said that Thomas Cook UK ran hotels, resorts, and airlines in 16 countries. Also, the firm served 19 million customers annually. The companys collapse grounded 34 planes, including Airbus A321 and A330, from four airlines. It also shut down its travel agencies.

BBC News said that the collapse has put 22,000 jobs across the world at risk. And 9,000 of those jobs are in the United Kingdom itself. This sudden collapse led to the cancellation of bookings of more than 150,000 British holidaymakers. It has impacted 450,000 customers internally.

The Thomas Cook UK collapse benefitted rival travel agencies and airlines, especially budget airlines. Budget airlines are known for normalizing overcapacity in the sector. Stocks of travel agent TUI (TUI) and online holiday retailer On the Beach (OTB) rose more than 9.0% yesterday. Stocks of budget airlines EasyJet (ESJ) and Ryanair (RYA) rose as much as 6.6% and 2.8%, respectively.

However, the Thomas Cook UK collapse has put its banks and IT (information technology) partners under pressure. Thomas Cooks IT partner Amadeus (AMADY) stock fell 2.9% yesterday. Also, the collapse is drawing attention to French budget carrier XL Airways. According to Reuters, the company is seeking $38.6 million rescue funding from Air France.

Thomas Cook UK is insured by the government-run travel insurance program. This means the British CAA (Civil Aviation Authority) will bring home over 150,000 Thomas Cook British holidaymakers.

The CAA has announced Operation Matterhorn. This is the biggest peacetime repatriation operation since World War II. Under this plan, the CAA chartered 45 jets from various airlines, including EasyJet and Virgin, on Monday. These jets flew 64 routes and brought home more than 14,700 passengers.

It aims to repatriate all affected passengers in the next 13 days by chartering more jets. The CAA plans to bring home as many Britons as they can on their booked return date. However, a small percentage of customers will still be affected.

According to The Guardian, some critics argue that the cost of bringing customers home exceeds the $250 million bailout Thomas Cook UK needed to survive. According to BBC, shadow chancellor John McDonnell said the government should have bailed out Thomas Cook if only to stabilize the situation while a real plan for the future of the company could be addressed.

The Indian newspaper The Economic Times posted British Prime Minister Boris Johnsons reply. He said the company directors were not motivated to sort such matters out. Hence, the British government did not bail out Thomas Cook to prevent a moral hazard.

Although Thomas Cook UK ceased trading, its Indian, Chinese, German, and Nordic subsidiaries will continue normal trading. These subsidiaries are separate legal entities from Thomas Cook UK and do not fall under the jurisdiction of the UKs Official Receiver.

Indian newspaper The Hindu Business Line noted that Canadas Fairfax (FRFHF) bought a 77% stake in Thomas Cook India in August 2012. Under the deal, Thomas Cook UK will no longer to be the promoter of Thomas Cook India. TCG no longer had a stake in the subsidiary. Thomas Cook India is debt-free on a stand-alone basis. It earns average annual FCF (free cash flow) of ~$35 million. Also, Thomas Cook India has a cash reserve of $195 million.

However, Thomas Cook UK subsidiaries share services like aircraft and IT with Thomas Cook UK. If these subsidiaries want to continue trading, they need to strike rescue deals. If they fail to do so, the parent company collapse will affect up to 450,000 international customers.

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Thomas Cook UK Fails to Avoid Bankruptcy - Market Realist

Federal lawmakers on Thursday proposed a bill that would require companies to file for chapter 11 bankruptcy in a courtroom close to their principal place of business, rather than where they are incorporated.

The bipartisan bill, called the Bankruptcy Venue Reform Act of 2019, hopes to spread bankruptcy cases throughout the US to ensure that employees, small businesses and local employees are able to fully and fairly participate in the proceedings.

Current federal law allows companies to file for bankruptcy protection either where they are incorporated or where they operate much smaller affiliates. Most often, bankruptcy cases have been decided in either Delaware or New York. Supporters of the existing law argue that the experienced judges in popular venues like Delaware can better handle complicated issues.

Delaware Governor John Carney reiterated that companies from around the country choose to incorporate in Delaware specifically because of the expertise and experience of Delawares judges, attorneys and business leaders.

Experienced bankruptcy courts and judges are critical to ensuring that restructurings preserve the underlying businesses and save jobs. Altering the venue laws that have been in place for decades and replacing them with restrictions undermines well-settled principles of corporate law, threatens jobs, and hurts our economy.

Representatives Zoe Lofgren (D-CA) and Jim Sensenbrenner (R-WI) introduced the bill.

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Federal lawmakers propose new bankruptcy venue laws - JURIST

As Purdue Pharma undertakes the laborious bankruptcy process, plaintiffs in thousands of opioid suits are looking to lock in settlement funds from the stripped-down drugmaker. Purduefor its partis hoping to secure incentives for its employees in the meantime.

Purdue has asked permission to pay out more than $34 million in annual and long-term incentives to its employees as the company undergoes a court-supervised restructuring, according to a Chapter 11 motion filed Monday in the Southern District of New York.

As part of its request, Purdue hopes to pay $26.5 million by March 2020 for its annual incentive plan, which awards employees based on personal performance and the financial performance of the company, Purdue attorneys wrote. The drugmaker is also seeking $7.9 million in its long-term cash incentive program, which covers three years of employee performance.

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Attorneys for Purdue argued the two programs were critical as an employee motivation tool but said the plan would not be used to pay company insiders prior to a signed settlement.

In an emailed statement, Purdue said the incentive funds were important tools to retain employees and are standard across pharma. However, the drugmaker didnt specify which of its 700 employees were eligible for the incentives or whether the incentives were appropriate given the companys bankruptcy filing.

Retaining our talented and dedicated employees is a key determinant of the companys future value, the company said. These bonus payments at the company are awarded through long standing annual benefit plans, are reasonable in amountand similar programs are commonplace at most companies.

RELATED: State attorneys general promise bankruptcy court showdown as Purdue inks $10B opioid settlement

While the incentive plans may be standard for the industry, Purdues current financial state is not. The company is wrappinga record-setting settlement with 24 states and thousands of local plaintiffs over its marketing of powerful opioid OxyContin.

Monday, Purdue agreed to offer upat least $10 billion to help fight the opioid crisis that the drugmaker itself allegedly helped create. As part of the deal, the company filed for bankruptcyand intends to restructure as a public benefit trust to provide the free drugs and financial contributions that make up the majority of the settlement.

Under the arrangement, the companys billionaire founding family, the Sacklers, will chip in at least $3 billion, and Purdue will provide overdose reversal medicines plus proceeds from ongoing sales.

RELATED: Who joins Purdue on pharma's top 10 settlements list? Merck, GSK and Pfizer, for starters

Purdues settlement would make it the first drugmaker to strike a deal in a multidistrict litigation in Cleveland that has roped in around 2,000 cities, towns and villages. Three other drugmakersEndo, Allergan and Mallinckrodthave separately settled with two Ohio counties but have yet to reach massive deals of their own.

The Purdue deal would immediately rank as the single largest settlement ever struck by a drugmaker, but more could be on the way as the Cleveland litigation proceeds. Despite 24 states signing on to the agreement, other state attorneys general have pledged to fight Purdues bankruptcy in the hopes of derailing the deal.

So far, those bankruptcy filings have not only shed light on Purdues corporate structure but also the firms attempts to spin the narrative as opioid lawsuits have piled up.

According to The Intercept, Purdue retained controversial PR firms Purple Strategies and Dezenhall Resourcesthe corporate spin doctors who worked with BP after the disastrous 2010 Deepwater Horizon oil spill. Purdue said in a filing it owed the two firms $300,000 for services rendered.

Read this article:

Purdue seeks $34M in employee bonuses as bankruptcy process begins - FiercePharma

Shares of ailing oil-and-gas engineering and construction company McDermott International (MDR) fell off a cliff last week after media reports of the company having retained turnaround consulting firm AlixPartners LLP "to advise on efforts to improve cash flow and stem a recent spate of net losses" emerged.

Last year's ill-advised acquisition of Chicago Bridge & Iron ("CBI") is now threatening to take down the combined company after massive losses in legacy CBI projects continue to mount.

Photo: Cameron LNG Facility Construction Site at Hackberry, Louisiana - Source: Mitsui & Co.

Two months ago, McDermott reported an abysmal Q2/2019 and significantly reduced guidance for the remainder of the year. Management's projection for cash outflows to more than double from previous expectations to $640 million for FY2019 was perhaps the most troubling disclosure at that time.

In addition, the company continues to struggle to sell its industrial storage tank business and the remaining part of its pipe fabrication business with a transaction for the storage tank unit now expected in Q4/2019. Aggregate cash proceeds are now expected to be lower than the $1 billion previously estimated by management.

That said, on the conference call, management expressed its satisfaction with the company's cash on hand and available credit facilities of $1 billion in total and insisted on the company's liquidity profile being "adequate" a number of times.

The big question is: If the company's liquidity profile remains adequate and additional cash soon being provided by the imminent sale of the storage tank business, what is the recent fuss all about?

At least when judging by my long lasting experience in corporate debt restructurings, particularly in the energy space, the combination of the above discussed issues almost certainly results in the company filing for bankruptcy at some point going forward.

While not impeccable, bond prices often act as a harbinger for things to come particularly in case of ongoing restructuring negotiations. While bondholders directly involved with the company are usually restricted from trading in the company's securities, this, in many cases, does not prevent information from leaking into the markets.

Moreover, the company's $69 million semi-annual bond interest payment will be due on November 1 and judging by the price action in the bonds, the company might actually consider omitting the payment.

That said, McDermott's bonds have also been on a wild ride recently. After having traded at around 70% of face value for the past couple of weeks, the news of potential debt restructuring caused the bonds to trade down to below 20% on Thursday only to temporarily double on Friday following the company's disclosure to have retained investment bank Evercore to explore strategic alternatives after it "recently received unsolicited approaches to acquire all or part of Lummus Technology, McDermott's industry-leading technology business, with valuation exceeding $2.5 billion" only to fall back into the mid-20% area as of the time of this writing.

Clearly, the majority of bond investors does neither expect the company to remain within its current capital structure nor to be made whole in a potential debt restructuring at this point and I very much agree with them.

Given last week's events, I do not expect the company to close the proposed sale of the storage tank business for the foreseeable future not to speak of the remainder of its pipe fabrication business.

Regarding Lummus Technology, it is very hard to imagine that McDermott could really succeed selling the business in due time at the stated valuation as buyers are used to picking up assets of distressed companies at bargain prices.

While at least one sell-side analyst thinks the hail mary attempt to save the company from bankruptcy could work, I remain doubtful. Moreover, the company's senior secured term loan lenders might object to the proposed sale if they consider a restructured McDermott to be better off long-term by keeping the unit.

While there's undoubtedly a lot of going on behind the scenes at McDermott right now, this doesn't mean that key information hasn't already leaked.

Given the upcoming bond interest payment, a debt restructuring agreement and a subsequent bankruptcy filing could become reality much sooner than many market participants might think at this point.

But there's another issue investors need to consider:

Last week's events didn't exactly help the company to win new business and I fully expect McDermott to be met with increased scrutiny by potential customers and contractors going forward which could cause the downward spiral to accelerate even further.

The company urgently needs to work through the legacy issues mostly inherited from CBI while at the same time stabilizing the balance sheet and potentially shore up liquidity to show its ability to execute on both existing as well as potential future contract awards.

My personal expectation is for the company to enter a restructuring agreement with creditors rather sooner than later with bondholders getting the lion's share of the new equity and current equityholders only receiving a very minor stake in the restructured company.

Given the very real possibility for the common equity to be wiped out entirely, investors should remain on the sidelines.

Expect the shares to remain highly volatile and mostly serve as a playground for momentum traders and speculative retail investors for the time being.

While I have traded the shares on both the short and long side over the past couple of sessions, I do not own a position in McDermott at the time of this writing.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: While I don't own a position in MDR at the time of this writing, as a daytrader I might decide to enter into a short or long position in McDermott's stock at any time.

Link:

McDermott - Struggling To Avoid Bankruptcy - Seeking Alpha

Less than five years after its inception, the Charlotte-born beer delivery service BrewPublik has filed for bankruptcy. The localstartup darling expanded in recent years, evolving from its signature home-delivery to supplying craft beer to the headquarters of major Silicon Valley companies, including LinkedIn, Google and WeWork.

In an interview with the Agenda, co-founder and CEO Charlie Mulligan said that the decision to file Chapter 7 bankruptcy last week was not prompted by any major event or drop in sales. Revenue has grown consistently by roughly 80 percent every year, Mulligan says. Overall sales totaled over $2 million last year, he says.

Still, the company wasnt growing as quickly as Mulligan and his team had hoped. BrewPubliks debts mounted, and its employees simply wanted to move on to something different.

Generally things were proceeding in a positive manner, says Mulligan, 30. This was just a decision having to do with what everybody in the company kind of wants to do with their lives.

Former employees, however, contend Mulligans optimistic spin on the situation.

Brandon Reed, who oversaw BrewPubliks East Coast operations, says employees were not consulted about Mulligans decision to file for bankruptcy.

Mulligan oversaw the companys finances, but Reed and others knew that BrewPublik owed a lot of people a lot of money. Among the creditors listed in BrewPubliks bankruptcy filing are breweries and distributors in California, an artist in Charlotte, financial consultants in New York and the Internal Revenue Service.

The way he worded it to me (was) hes like the guy in the movies walking out of a burning building, Reed says.

All those people he owes money to? Theyre not walking away. Theyre still in the building.

When he and a few friends started BrewPublik, Mulligan used an algorithm (called a beergorithm) to curate a selection of craft beers for customers once a month.

The highs and lows of starting a company from scratch never change, Mulliganwrote in a column that appeared in the Agenda inAugust 2015.

Sometimes, I feel like Im on the precipice of the most exhilarating life ever. At other times, I look around and legitimately worry that Im going to end up penniless and destitute.

In 2016, venture capital firm SierraMaya360 said it would invest $5 million over five years to to help accelerate BrewPubliks growth. SierraMaya360 founding partner Amish Shah introduced Mulligan to 500 Startups, an accelerator based in San Francisco. BrewPublik became the first Charlotte company accepted into the program.

Within a few months, the tide started to shift for BrewPublik, which hadits headquarters at the AvidXchange Music Factory.

An early 2017 article in the Charlotte Business Journal called into question how robust SierraMaya360s investment in BrewPubliks business really was. The article (headlined What happened after this venture capital firms big splash in Charlotte? Not much) stated that to date, BrewPublik had only received $15,000 from SierraMaya360.

Jeff Brokaw, a former associate at SierraMaya360, said that was the extent of the firms investment in BrewPublik. Brokaw left SierraMaya360 in December 2016.

Nothing additional was ever put (in) it, Brokaw told the Agenda.

SierraMaya360 could not be reached for comment. Mulligan told the Agenda that BrewPublik had not secured additional venture capital funding since SierraMaya360s 2016 announcement.

In late 2017, BrewPublik said it would discontinue its home-delivery service in order to right size the company, the Charlotte Observer reported at the time.

Indian Trail resident Candy Lake says she was one of BrewPubliks early customers. She enjoyed the surprise of the curated beer selection delivered to her doorstep, as well as to her tailgates before Panthers home games.

Lake says she was very disappointed when BrewPublik discontinued home delivery in favor of corporations.

I think thats where they went wrong alienating their first core customers, Lake said in an email.

When BrewPublik discontinued home delivery, Mulligan told the Observer that the company had extremely ambitious expansion plans in 2018, including anexpansion into at least seven total markets.

By the time it declared bankruptcy, BrewPublik had expanded its beer-delivery service to five markets: San Fransisco, Seattle, Charleston, Charlotte and Raleigh.

Were very young company, and ultimately it became less attractive to continue, Mulligan says.

Startups have something like a 90 percent failure rate, Fortune, Forbes and others have reported.

The forces against them are strong, Mulligan says. Startups grow a business out of nothing, often in undeveloped industries. They feel compelled to expand in a short period of time in order to meet investors ambitious goals.

I dont think theres anything wrong with that. I just think if youre not getting the traction that you want to, eventually it does really wear on everybody, Mulligan says.

Its now also getting easier to get alcohol delivered to your doorstep through companies like Doordash and Uber Eats. Mulligan says competition wasnt really hurting BrewPublik, though.

The majority of those grocery-store-based delivery systems dont work that well with the curated type experiences that BrewPublik was providing to customers, Mulligan says.

A small business files for Chapter 7 bankruptcy when it is unable to repay its creditors.

Unlike in a Chapter 11 bankruptcy, a business has to discontinue operating if it files Chapter 7. Mulligan says BrewPublik worked to take care of its outstanding commitments before filing last week. Mulligans attorney, Travis Sasser, declined to comment.

A bankruptcy filing is just to try to make sure that anybody who has a claim gets fairly treated and that everything gets distributed properly, Mulligan says. He could not be reached for further comment about the companys debts.

After BrewPublik shut down, Reed, the former BrewPublik employee, quickly started his own company, Vibe Carolina, which also delivers curated craft beer selections. Hes focused just on North Carolina for now, and works with some of the customers who used to use BrewPublik.

I didnt want to do anything different; I loved my job. Thats why I opened up my own company, Reed says.

Original post:

Behind the sudden bankruptcy of Brewpublik, the Charlotte startup that delivered beer to Google and WeWork headquarters - Charlotte Agenda