A tough economy coupled with a lawsuit with the former owner, has forced a powerboat company based out of Washington, North Carolina, and its affiliates, to file for Chapter 11 bankruptcy protection. This is the second time that the company has filed for bankruptcy protection in the last three years.

Filing for Chapter 11 bankruptcy is similar to Chapter 13 in that it is specifically designed for partnerships, corporations, and certain individuals to help manage the debt. The company has listed more than $53 million in liabilities and approximately $50,000 in assets according to court documents. In the suit, the company claims that after exempt property is excluded and administrative costs are paid, there won't be any money left to pay their unsecured creditors.

After the bankruptcy filing in 2009, the company and a partner filed a joint reorganization plan. As part of the plan, the partner would acquire the company. The former founder and owner of the company, was named the CEO, but parted ways with the company at the end of 2010.

The former CEO then sued his former company for money that he says needs to be paid to him, as well as trophies and pictures from his racing days. He also alleges improper business dealings by the company's current CEO in court papers.

The powerboat company filed its own lawsuit against the former CEO saying that he took, company property, and violated a trade secret policy when he left the company.

The turmoil with the reorganizing, the lawsuit and the unstable economy has made it difficult for this company to make a fresh start. This court case remains open.

If you are a business owner and are in a situation where you are struggling to meet your financial obligations and don't know what options you might have, it would be in your best interest to speak to a bankruptcy attorney. They can navigate the system and help you develop a plan that is best for your company.

Source: Trade Only Today, "Fountain Powerboats files for Chapter 11 bankruptcy again," Jan. 23, 2012