The bankruptcy process can be an important resource for struggling businesses to consider. While it is a difficult process to initiate and certainly a challenging decision to make, it can often be the best choice and option for a business struggling to keep afloat.
According to recent reports, a laboratory company is planning to sell its medical diagnostics business and most of its assets to a Tennessee company as part of the laboratory company’s Chapter 11 bankruptcy. The Tennessee-based laboratory services company will purchase the company as part of the court-supervised auction. The Chapter 11 bankruptcy filing in this case is facilitating the sale of the business and protecting the business until the sale closes.
The planned sale is set to wrap up in 45 days. The purchasing company is supplying sufficient capital during the sale for the company being purchased in order for it to continue to operate through the sale. Representatives for the Chapter 11 company noted that the bankruptcy process was a step that allowed the struggling company a way forward. Chapter 11 bankruptcy allows the company that has made the filing to continue to operate during the bankruptcy process except in extreme circumstances.
Chapter 11 bankruptcy provides an option for a struggling company to prevent creditor collection actions while it seeks to raise capital, find a buyer or restructure. Chapter 11 bankruptcy can be a complex process with different options to consider, so it is important for companies considering it to be familiar with how to navigate the different aspects of the process. Chapter 11 bankruptcy can provide much-needed relief to a company that wishes to remain in business but is struggling to remain afloat.
Different bankruptcy options are available for both companies and individuals struggling with debt and hard times. Different options are available to allow for restructuring, such as the Chapter 11 bankruptcy process, or liquidation which can provide debt relief and a fresh financial start to return to profitability following the bankruptcy process.
Source: Richmond-Times Dispatch, “Bostwick Laboratories plans to sell its business to a Tennessee-based lab,” Katie Demeria, March 14, 2017