Even some of the fastest-growing companies in Tennessee and throughout the United States can unexpectedly encounter financial challenges. A sign company in another state was on the Inc. 5,000 list as a company that generated approximately $6 million in revenue. Things took a turn for the worse, however, when the company became entangled in a dispute with one of its largest clients, which ultimately led to a filing for Chapter 7 bankruptcy.
The clients own a lumber company, which hired the sign company to help it transition away from its original brand to a new company name. At some point, each of the companies claimed that the other one owed them money. The situation wound up in litigation, and the sign company was reportedly unable rebound from the situation.
Chapter 7 often helps companies start afresh
The sign company is said to have up to $1 million in assets but may have owed creditors 10 times that much. When a business owner takes advantage of Chapter 7 bankruptcy, existing assets are liquidated, and proceeds are used to pay off the company’s debts. Being able to obtain immediate debt relief may be just what a company needs to re-enter the marketplace on more solid financial ground.
An attorney representing the sign company stated that his clients are well-known and widely supported in their community, and it is their hope to vindicate their contractual rights through bankruptcy proceedings. Any business owner in Tennessee who might be facing similar circumstances may want to meet with an experienced bankruptcy law attorney to discuss his or her case. Such an attorney can review specific details and determine which type of bankruptcy best fits a particular client’s needs.