Keeping Liquor Licenses

If you own a restaurant or a bar then you probably have a license to sell beer or alcohol and need it in order to operate and make money.  If you have an alcoholic beverage license and are under a mountain of debt, you may be asking yourself, "Can I keep my liquor license if I file?"

Can I Keep My Liquor License If I File Bankruptcy In San Diego?

Treatment of a liquor license in bankruptcy in San Diego depends largely on the type of license that you have.  Full licenses have a substantial value, often in excess of your applicable exemptions, and therefore if you file for bankruptcy the Court appointed trustee overseeing your case could take control of and sell your license to generate funds to pay your creditors.

 

If you have a beer and wine license, this type of license generally has a much lower value to the trustee than a full license and, moreover, due to the lower value it is more likely to be covered (protected) by your applicable exemptions.

 

Frequently, I speak with business owners who have been misinformed that their liquor license is immune in bankruptcy proceedings because it is a license.  This is not the case.  There seems to be a lot of inaccurate information out there.

 

Most liquor licenses are transferrable, meaning that you can sell your license to a qualified buyer provided that the buyer is approved by the California Department of Alcoholic Beverage Control (the ABC) to have the license assigned to him or her or their company.

 

Because your liquor license has a cash value, the trustee could exercise control over it and sell it in order to generate funds to pay off part of your debts owing to your creditors, or if you file a Chapter 13 repayment plan proceeding, the trustee could ask the Court to require you to pay more money to your creditors through your Chapter 13 plan, an amount equal to the amount that could have been generated for your creditors if your liquor license were sold to pay off your creditors.

 

There are ways to protect your liquor license in bankruptcy in San Diego, and frequently you can file and keep your alcoholic beverage license, while eliminating all of your debt.  You should consult with an experienced lawyer to determine how your liquor license will be treated in a bankruptcy filing.

This entry was posted in Exemptions.


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