7 Recent Bankruptcies With Devastating Impacts on Michigan

I may be a dying breed, but when making a purchase, I like to see, touch, feel, and sometimes even smell a product before forking over my hard-earned cash. Is it as easy as scrolling, clicking, and checking out online? Nope. But I still prefer it. However, a lack of actual in-store, living, breathing, and human commerce might spell retail disaster for seven of Michigan's most beloved retailers and restauranteurs that have filed bankruptcy since 2023.

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Before we get into the list, if you didn't already know, not all bankruptcies are the same. Bankruptcy is essentially a way of reorganizing your business to make it profitable once again or to liquidate assets to close up shop. Here's a quick overview of two different types of filing failing businesses can use to stay afloat.

Chapter 11 Bankruptcy: The Drama Queen of Business Bankruptcy

Think of Chapter 11 as the diva of bankruptcies. Essentially, the business gets to act like everything is fine while begging creditors for more time to settle their tabs. A spotlight is turned on the failing business, and all of its assets, liabilities, and profits—scars and all—are paraded through the court as suits take center stage to show off their shiny new restructuring plans.

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Creditors and courts then act like a panel of judges on a reality singing competition to determine whether the game plan is strong enough to keep the business open or if they should cue the band for a Titanic-like sinking.

Chapter 7 Bankruptcy: Everything Must Go, Right Down to the Fixtures

When a business's dreams have turned into night terrors, and there's zero hope it will recover, cue Chapter 7. Once filed, court-appointed trustees swoop in to sell everything that isn't nailed down. All profits from the sales get handed over to creditors, and if there's debt remaining after the sales are complete, the bill is handed back to the company that filed for bankruptcy.

While some businesses are able to bounce back from a bankruptcy filing, it's a difficult time for all involved.

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The impact is especially hard when the companies filing for financial protection often leave hundreds, if not thousands, of people unemployed or unable to find similar services in their area.