Most companies in every industry have faced several issues that at the end of the day can help them learn and improve from those situations. One example of these issues we consider important to discuss is the fact of organizations having no other option left but to file for Chapter 11 which doesn’t necessarily mean the company is on their way to closing but a way to reorganize and come out stronger. Take a look at how companies improve and focus their resources on growing their business after overcoming an obstacle!
Reorganizing the Company Without Interrupting the Business Procedure
A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy where a business is allowed to reorganize its debt under the protection of the bankruptcy court. In most cases, the company continues working without an impact on future sales or customer experiences. Additionally, employee wages of the company that filed for bankruptcy should not be interrupted as the court gives permission to continue paying its employees as long as they continue doing business. Also, creditor’s claims are assigned different levels of importance depending on the nature of the debt which will be paid off as the procedure becomes finalized in court. But, regardless of whether you have a priority claim, an administrative claim or a general unsecured claim, in order to be paid your claim, you must file a document called “Proof of Claim,” supported by any documents that would show how much you believe you’re owed The bankruptcy rules require every company to be very transparent with how money is spent, what money is coming in on projects, and what money we have to put away to make payments to the creditors who have had to wait to collect because of the bankruptcy filing.
Always Prioritizing Our Clients
Moreover, a company that is currently experiencing a bankruptcy can assure their customers that the overall business will be running the same as before the filing. For example, iHeartRadio recently filed for bankruptcy but the overall situation won’t affect the way people interact with the music streaming service or their events. Currently, iHeartMedia is in charge of over 850 stations, aside from several music festivals, events, and concerts and “if you were listening to iHeartRadio, or going to iHeart concerts” you wouldn’t be affected by what’s going on behind the scenes, stated Debtwire analyst Seth Crystall.
“Ultimately, when they come out of bankruptcy, they will be in a much better position. We expect them to be able to focus their resources on growing their business rather than on debt service, which is what they’ve had to do for the last 10 years.”
-Lance Vitanza, Cowen Analyst
Moreover, companies that may be found in this situation have no choice but to look for ways to improve their structure that will allow them to refocus on being the best they can possibly be, always striving to earn their client’s trust by using all of their resources and legal guidance to achieve it.
If you have any questions or want more information about the Chapter 11 of the United States Bankruptcy Code, feel free to contact us at firstname.lastname@example.org