Chapter 11 bankruptcy is an important type of bankruptcy protection that can help a struggling business reorganize their debt and stay in business. A Tennessee-based discount retailer and pharmacy chain has announced it is seeking Chapter 11 bankruptcy protection. The company has begun liquidation sales and will be closing stores in the coming months. Earlier this year, the company announced it was closing greater than 280 underperforming stores in 13 states. Through the bankruptcy court, the company is seeking a financing agreement up to $35 million with certain lenders
As is true of personal bankruptcy protections, there are different types of bankruptcy protection for struggling businesses to consider. A Chapter 11 reorganization bankruptcy can help a struggling business reorganize its debts, restructure and seek additional sources of capital, or a purchaser, to help the struggling business remain in business but also address its overwhelming debt concerns. This bankruptcy process is best for a company that wishes to continue in business.
Chapter 7 bankruptcy is also available to struggling businesses that are not interested in continuing the business and wish to liquidate assets to repay creditors. It is important to keep in mind that these different bankruptcy protection options are available and that both businesses and consumers can change from one type to another depending on their needs, goals and any change in circumstances. Chapter 13 bankruptcy is the form of personal reorganization bankruptcy available and Chapter 7 liquidation bankruptcy is available for both struggling businesses and consumers.
Bankruptcy protections can help both businesses and consumers find a positive financial future and help change what is oftentimes a stressful outlook. As a result, anyone facing insurmountable debt challenges should be familiar with bankruptcy protections and how they can help.