This week, the focus of Bankruptcy in Indiana has been on the “moral of the story”. News stories about bankruptcies are often the most powerful way to show how the new bankruptcy laws of Indiana offer a safety net for individuals, families, and businesses who have fallen on difficult financial times.
In business and in life in general, all of us at the Zuckerberg bankruptcy law offices have learned, you simply cannot predict what the future might bring. Despite the pervasive myth that bankruptcy is for deadbeats, the reality is, many, many financially responsible people get blindsided by circumstances beyond their control. In many of those cases the only course of action is filing Indiana personal bankruptcy, small business bankruptcy, or both.
Take the story of That Game Company, which an Anderson bankruptcy lawyer colleague was talking about the other day. Game company was developing a computer game called “Journey”, and had signed a two-year deal with Sony to complete the game. When they couldn’t get the job done in that time frame, Sony gave them a year’s extension, but that still wasn’t enough. Game Company’s owners and employees were totally committed to the project, and some of the employees went unpaid, with the studio dipping into its own funds. In the end, filing bankruptcy became the only possible course of action.
While reading the news item about the game company, I got to thinking about the thousands of Indiana small business bankruptcy clients with whom I've worked over the years and what I've learned about the way entrepreneurs operate. Not a single one of those clients, I’m convinced, went into business even considering "failure" as an option. Yet, as all good bankruptcy lawyers in Indiana know, the reality is that a large majority of small businesses do end up failing.
Quite often, the problems are related to financing, with customers "slow-paying" their invoices, with suppliers on the other hand demanding timely payment, with increased costs of inventory, plus the lack of available capital to expand and adapt to new technology (exactly what happened with the game company).
The bankruptcy system is designed to provide a safety net and a fresh start in situations like this. For a free capitalistic system to work, entrepreneurs need to be willing to take risks. The fact that there is a "last resort" in place when the best efforts fail serves as encouragement to do just that, to keep on “playing the game”.
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg