Filing for bankruptcy can be hard for a California business. Debt solutions that involve bankruptcy are usually the result of a long fight to stave off financial collapse. This situation can be particularly complicated when the misconduct of others is seen as a contributing factor.

The owners of an Orange County mobile home park filed a complaint in Orange County Superior Court this fall accusing their insurers of misconduct in handling certain property claims. The allegedly mishandled claims arose from a failure-to-maintain lawsuit that residents brought against the park in 2007. The owners of the park allege that the insurance companies mishandled the trial and intentionally delayed settlement, exposing the park owners to greater liability.

The lawsuit was dismissed about a month later after the park owner withdrew their complaint. But, the business maintains that the misconduct of its insurers is the primary reason it was forced into filing for bankruptcy in July. The complaint states that the refusal of the insurers to settle the residents' claims, and the resulting financial pressures of that decision, forced the company to file for Chapter 11 bankruptcy protection. The attorney representing the mobile park owners said they dropped the complaint because they are seeking a resolution in the bankruptcy court.

There is still much that is unsettled in this case. This case illustrates why it is important for California business owners facing financial difficulties to become familiar with all the legal facts regarding debt relief and debt solutions. Few business persons enjoy the pressures of dealing with debt. The protections and stipulations of the law may be able to help owners overcome such financial hurdles.

Source: The Orange County Register, "Mobile home park owners blame insolvency on insurers," Frank Shyong, Nov. 30, 2011