For Tennessee residents who liked the idea of buying their mobile devices online at cheap prices, Wirefly was the ideal solution. However, the company, which seemed to be enjoying success, has suddenly gone out of business and filed for Chapter 7 bankruptcy. Meanwhile, customers and employees alike are left without a clue as to what exactly happened.
The website was down as of March 12, with a customer even contacting a Wirefly representative via Facebook to get answers about a pending order. According to the Facebook conversation, it appears as though customers will eventually be refunded their money for recent purchases, but nobody from the company has had the courtesy to contact customers about their orders. Even employees were suddenly let go from the company.
Nobody was aware that trouble was brewing for the startup with a bright future. Wirefly offered free and low-priced phones for popular carriers such as Verizon, Sprint and T-Mobile. A Wirefly employee did disclose that the company had filed for Chapter 7 bankruptcy, but no details were known.
Most businesses start by filing for Chapter 11 bankruptcy, which allows business owners to reorganize and repay debt under a payment plan while continuing to run the business. But Wirefly chose the Chapter 7 option, which means that all assets will be liquidated, debts will be canceled and the company will shut down. This is often what companies do when they have overwhelming debt and not enough assets to pay them. Other business struggling with debt will want to consider what options may be available, as there may be a way to avoid going out of business and emerge from bankruptcy in a stronger position.
Source: Android Community, "Wirefly suddenly closes up shop, will be filing Chapter 7 bankruptcy," Nate Swanner, March 13, 2014