For most of the business owners in Salem who are considering bankruptcy, the preferred method is to file for a Chapter 11 or “reorganizational” bankruptcy. The reason being is just that: it allows them to reorganize their companies into a different structure (and oftentimes, under new leadership) to help move on from their financial struggles in the past to a much more well-managed future. However, there may be certain cases were circumstances do not allow a company to continue without first settling all of its liabilities. In such a case, a small business owner may have no choice but to pursue a Chapter 7 case.
An alleged unwillingness on the part of its lenders to work with it has prompted an Alabama clinical research lab to seek such a bankruptcy. According to company officials, several partners with whom it worked had expressed in interest in allowing it to continue to work towards a situation to resolve its debts. However, with no means of extending the kind of financing that it needed it in sight, the company was left having to accept ceasing its operations and filing for Chapter 7 as its only viable option. As a result, its 300 employees are now left searching for other jobs.
Typically, a company must meet certain criteria in order to file for Chapter 7 bankruptcy, one of which is a total debt amount below a certain threshold. In this particular case, the company listed less than $50,000 in liabilities. While it may seem sad to think that solution could not be reached to resolve such a seemingly small amount of debt, sometimes the best step may be to pursue a complete bankruptcy and start anew. A bankruptcy attorney may be a good person to turn to in seeking such advice.
Source: AL.com “Atherotech files Chapter 7 bankruptcy, leaving 300 out of work” Poe, Kelly, Mar. 14, 2016
