Erie County Farms Gets Last Chance to Avoid Liquidation

by San Antonio Attorney

Local supermarket Erie County Farms decided to carry out a community fund raiser to save its business.  Natalie Pacileo, the owner, has gotten her final reprieve in the bankruptcy court after he guaranteed that fundraisers have an “awesome” plan to help the 50-year old grocery store.

At a hearing on Nov. 3, Pacileo told the bankruptcy judge that they will make money.

U.S.  Bankruptcy Judge Thomas P.  Agresti, who was doubtful of the proposal, gave her the chance to stop a liquidation of the store, which would have to be sold in order to pay back creditors.

Erie County Farms and Pacileo and are in Chapter 11 bankruptcy, wherein the debtor remains in business but restructures to repay its creditors in due course.  The 80-year old business owner, who sought for bankruptcy protection ten months ago, has not yet filed a debt repayment plan that is satisfactory to her creditors.

Pacileo stated $1.7 million in debts, which includes $364,500 to the IRS and other taxing authorities.  Her personal possessions, such as her home, can be taken away in the bankruptcy since she did not incorporate the business.

One of her major problems is that she did not to remit over $117,000 in payroll taxes to the federal government.  As the bankruptcy judge mentioned repeatedly on the last hearing, Pacileo has used that money in order to keep the business operations going.

The judge said that Pacileo is potentially committing bankruptcy fraud.  The money being used is withholding taxes, according to Agresti.

The judge told Pacileo to settle those back taxes, and forward all incoming payroll taxes, in order to avoid converting the case to Chapter 7.  In addition, she was ordered to pay her employees promptly, and submit financial records to show her payments.

In the event Pacileo fails to keep up with the payments, the judge will convert the case to Chapter 7 without a calling for a hearing.

She begged the judge for a chance based on the plan to raise money by means of fundraisers.  A fundraiser is scheduled for Nov. 13.

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