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Tennessee developer files for business and personal bankruptcy

Many readers are likely familiar with the recent personal bankruptcy filing of Tennessee businessman Allen Casey. The Chattanooga Times Free Press reported that Casey filed for Chapter 7 bankruptcy protection in federal bankruptcy court in Chattanooga shortly after his company, River City Resort, filed for bankruptcy. The bankruptcy came as a surprise to many observers who know the businessman as the man responsible for taking a neglected railroad terminal and turning it into the famous Chattanooga Choo Choo.

According to Casey's Chapter 7 bankruptcy petition, he listed his total personal assets as $50,000 or less, while Casey's liabilities were listed as between $1 million and $10 million. Much of Casey's financial woes stem from business problems, which include an inability to develop a piece of riverfront property. Despite a number of attempts the site became a focus of community critics after Casey purchased a barge that ended up sitting in the river for years, only to become dilapidated.

The tract of land that once caused the developer so many headaches now may be the answer to a number of his problems. In fact, according to reports, the sale of the property, a valuable piece of downtown real estate, could sell for one of the highest prices per acre ever in the city. The land is currently on the market for $11.2 million. According to the bankruptcy judge, the right sales price could make the Chapter 11 case very easy. However, how this will affect Casey's Chapter 7 filing is unknown.

Filing for bankruptcy can be an overwhelming experience. In Chapter 7 bankruptcy, the debtor is required to report their assets and liabilities to the court and the court decides whether the debtors existing assets can be used to repay lenders. Once the assets available for liquidation have been sold and the necessary debts paid, the remaining debts are exhausted. Unfortunately, it is not uncommon for business financial challenges to coincide with personal financial challenges, often complicating matters.

Source: Chattanooga Times Free Press, "$11.2 million sought for Allen Casey's downtown Chattanooga tract," Mike Pare, March 19 2014

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