Chapter 11 bankruptcy can help struggling businesses get back on track. A logistics company based in North Carolina recently filed for Chapter 11 reorganization bankruptcy protection. The owner of the company cited natural disasters in recent years as having a negative impact on the business. The filing company listed that is has three truck and employs five drivers and also operates a storage facility. The trucking business and storage facility will continue to operate as the company reorganizes.
In its Chapter 11 bankruptcy filing, the company listed that is has between 50 and 99 creditors and fewer than $1 million in assets. It also listed that is has liabilities greater than $3 million which includes $1.3 million in secured claims and approximately $1.7 million in unsecured claims. The company also listed its current revenue as approximately $3.2 million. According to the bankruptcy filing, the company earned close to $10.4 million in 2018 and approximately $8.7 million in 2017.
Chapter 11 business bankruptcy is a bankruptcy option that allows a struggling business to continue to operate while it reorganizes its debts so that it can work on returning to success and profitability. Chapter 11 reorganization bankruptcy allows the filing company to renegotiate some of its debts with creditors who may receive more as part of the reorganization bankruptcy process than they otherwise would. In addition, it can provide the filing company time to seek additional sources of capital that can help with its liabilities.
As is always true of any bankruptcy protection filing, once the company files for Chapter 11 reorganization bankruptcy, an automatic stay prevents creditor collection actions while the bankruptcy process progresses. For a company wanting to remain in business and become profitable once more, Chapter 11 bankruptcy is one option to carefully consider and understand.