As Pinnacle Airlines deals with filing a Chapter 11 bankruptcy, Memphis International Airport and One Commerce Square downtown are both dealing with potential fallout. But according to Memphis Business Journal, the effects may be minimal - especially for the city of Memphis.
In the Journal's recent article on the bankruptcy, Larry Cox, president of Memphis-Shelby County Airport Authority, says he doesn't believe Pinnacle's changes will hurt the airport. The article states:
Bankruptcy is not the shameful thing many think it is, according to Cox.
“In the airline industry, just about everybody but one or two airlines have gone bankrupt, and some of them several times,” he said. “It’s just a way for them to align their costs with their revenues.”
At one time, nearly all of the regional airlines were making tons of money, according to Cox.
“That’s when fuel was cheap and the only thing they really had to pay market rates for were airplanes,” he said. “That’s all changed.”
Cox is right that the reputation of business bankruptcy has changed, especially in the airline industry. After all, with oil prices increasing and plane safety concerns on the rise, what other options do they have? In many cases, declaring bankruptcy is the best way for them to keep going, thus retaining employees over time and minimizing the impact of default.
But if everyone is more comfortable now with airlines filing Chapter 11, why aren't they more comfortable with consumer bankruptcy like Chapter 7 and Chapter 13 filings?
The answer is, they are. When we hear concerns about bankruptcy, it comes much more often from clients than from outsiders. Not only does bankruptcy usually stay private except for in obscure legal publications, but even family and friends who know about the bankruptcy tend to be very forgiving.
Bankruptcy can feel shameful if you're the person going through it, but just like it has not ruined Pinnacle's reputation or even their ability to do business in Memphis, it doesn't have to ruin you either. In fact, it can be the perfect way to get your finances aligned again - just like the airlines and like the millions of other people who, overwhelmed with debt, file every year.
If you have questions about what bankruptcy might mean for you, don't hesitate to contact our Memphis bankruptcy attorneys or call us at (901) 327-2100. We can discuss your options and give you a clear picture of how filing might affect your loved ones and your financial future.