I just read an article on something you don’t see very often in the funeral industry.  An article that was posted in the Times Herald Recordonline from Orange County, New York, pertained to the bankruptcy case, and hopeful solution to it, of a funeral business from that area.

The article is about Mr. Anthony Ingrassia who is president of a funeral home business with four locations in the area.  The article points out that he filed for Chapter 11 bankruptcy protection with assets of $2.7 million and a total of $2.2 million in liabilities with $2.15 of that liability owed to the Orange Bank and Trust Company.

From the article it appears that two of his locations seem to be profitable and two of his locations seem to be money pits.  He has asked the court to approve his request to sell two locations as “Office Complexes” and not funeral homes and then to continue to operate the other two locations.  Ingrassia’s attorney, Mr. Mike Pinsky, explained that selling those two locations would be best for the continued success of the “very strong” Middletown Funeral Home.  Chief Judge Cecilia Morris approved this arrangement earlier this month according to the article.

Funeral Director Daily take:  It is really interesting to see a case like this in the funeral industry.  I’ve come to learn that most funeral businesses, because of the “local” nature of their business, have very good rapport with local banks.  Also, the steadiness and traditionally conservative approaches of funeral home owners are music to the ears of most bankers.

Very seldom have I seen a funeral home bankruptcy.  This is partly because if a business was doing poorly there is usually a competitor or neighbor funeral home willing to purchase the business and try to turn the corner with an economy of scale turnaround.

What is interesting in the above case is that the current owner wants to continue to operate the profitable funeral homes and not turn the other two locations into potential competitors.  I think his thought process in doing so is good — selling the other two buildings with a non-funeral home use as a deed restriction can guarantee that.

I am perplexed, however, why the owner chose the very public act of bankruptcy to do so.  In my opinion, with $500k in assets over liabilities, it would have seemed prudent to try to work out a financing solution with a lender instead of now having a bankruptcy on your record and also having the public relations nightmare of people wondering, “Will they make it”?  In the funeral business, where pre-need arrangements can be a life-blood, might that work against them in the future?[wpforms id=”436″ title=”true” description=”true”]