A Chapter 11 bankruptcy is specifically designed to reorganize the debts of a business. This often allows Tennessee businesses to continue operations, so long as they are able to meet their financial obligations during the bankruptcy process.
Readers in the Chattanooga area may be interested to hear that American Suzuki Motor Corp. announced on Nov. 5 that it will stop selling cars in the United States. This decision is part of a Chapter 11 bankruptcy plan that the company filed in a U.S. Bankruptcy Court in California. The filing estimated that the total liabilities of American Suzuki are between $100 and $500 million.
Representatives of the company said it will continue to operate during the bankruptcy process, allowing it to honor buyback agreements and car warranties. It was also added that the company will continue to sell other vehicles, including all-terrain vehicles and motorcycles, in the United States.
The announcement included an explanation that American Suzuki was getting out of the car business due to the cost of complying with U.S. regulations, poor sales and unfavorable currency exchange rates. The parent company, Suzuki Motor Corp., will buy the remaining car operations of its American subsidiary, which will retain its name after the bankruptcy reorganization.
The owner of a business in financial trouble should consider all legal options, including a Chapter 11 bankruptcy. A business is often in better financial condition when it exits a bankruptcy because its debts have been renegotiated or eliminated during the reorganization process.
Source: CBC News, “Bankrupt Suzuki to focus on motorbikes in U.S. market,” Nov. 6, 2012