Many companies in Salem may have the resources needed to fight against litigation. However, small businesses often find themselves driven deep into the debt when trying to defend themselves from lawsuits. While vindication may ultimately come in court, the money spent to fend off a company’s legal troubles could make the potential of an economic recovery virtually impossible.
Such is the scenario currently facing a Florida TV repair company. The business had enjoyed a healthy revenue stream as recently as two years ago thanks in large part to its relationship with the television manufacturer Vizio. However, it was never able to recover after losing its contract with the big-screen TV giant. On top of that, Vizio has also filed a lawsuit against the company claiming that it used Vizio’s own consumer data to place harassing marketing phone calls to its customers. In the lawsuit, Vizio claims that the company advertised beyond its contracted service to provide warranty work and tried to sell customers cable and satellite TV subscriptions. The TV manufacturer also claims that the company implied that Vizio itself endorsed them as a provider of these services.
The cost of facing these legal expenses combined with the lack of big-name TV producing partners has left the company with a paltry $145,000 in assets compared to $1.5 million in liabilities. Late last month, it officially filed for Chapter 7 bankruptcy in a Florida court.
For companies facing litigation, bankruptcy may be the best option to deal with the massive debt that it can bring. Navigating one’s way through a Chapter 7 case may be much is easier if he or she has an experienced attorney on board to help.
Source: South Florida Business Journal “Company that once had $4.2 million in sales files bankruptcy liquidation amid lawsuit from Vizio” Bandall, Brian Feb. 04, 2016