A company called Pharmapacks is one of the top sellers on Amazon. Its annual sales typically exceed $500 million. A recent headline announced the company’s plans to liquidate assets and cease operations by filing for bankruptcy.
Financial trouble arose when company expenses began to outweigh profitability. After certain measures to overcome the financial slump proved unsuccessful, an acquisition agreement was forged with a special purpose company. However, the agreement was ultimately terminated, leaving Pharmapacks struggling to stay afloat, circumstances to which many Tennessee business owners can relate.
Bankruptcy provides immediate debt relief
In cases where numerous options fail to help resolve a financial crisis, it is often wise to consider filing for bankruptcy, which is what Pharmapacks determined was best in its case. Assets can be liquidated and proceeds used to pay back creditors. In this particular case, it likely means that the company will cease operations for good.
Other types of bankruptcy help businesses stay open
Some business owners qualify for a type of bankruptcy that enables their daily operations to continue while they are paying off their debts. One such program is Chapter 11 bankruptcy, which involves a court-approved payment plan that is more feasible for a business owner who has been hit by a financial crisis. To determine which type of bankruptcy best fits a particular business owner’s need, it is helpful to ask an experienced bankruptcy law attorney to review one’s case and make recommendations.