After taking a risk with starting a new business venture, some Florida business owners discover that their investment in the business will never pay off. Debt continues to increase and income generated by the business may not be enough for the owner to make a profit. As a result, many small business owners may consider filing for Chapter 7 bankruptcy so that they can pay off their debts by liquidating assets.
Earlier this week, we began discussing one Tampa business woman’s effort to raise money for charities by touring the world with a collection of Princess Diana’s dresses. By 2001, the People’s Princess Charitable Foundation had donated more than $1.5 million to charities, but the foundation also began experiencing some problems with expenses.
Expenses for legal fees, public relations consultancy and creating the exhibits to display the dresses added up to more than $1 million. The businesswoman also invested $1 million of her own money in an effort to keep the foundation running. Unfortunately, expenses continued to increase and the exhibits were not making as much money as the woman initially projected. The foundation borrowed another $88,000 but the money was not enough.
In 2006, the Tampa woman began a new business venture in real estate development and used Princess Diana’s dresses to secure a $1.5 million loan to fund the project. By January 2010, the woman decided to file for bankruptcy after the housing development project fell through.
Now the Tampa woman is auctioning off the Princess Diana dresses and will use the money to pay off all of her creditors in the bankruptcy filing. She believes that the gowns could raise as much as $4.15 million, which is more than what is needed to pay off all of her debts from the two failed business ventures. The remaining proceeds from the auction will go toward charity.
Daily Mail Online: “End of a dream: Princess Diana’s dresses up for auction after Florida woman who bought them for charity goes bankrupt,” Fiona Roberts, 24 June 2011