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Creditor disputes threaten the sale of Cosi Inc. to lenders

There are any number of reasons why businesses in Salem and throughout the rest of the U.S. may struggle financially. The key to moving past them may often be to recognize the most effective ways to manage debt rather than running from it altogether. This may assure a business the right to remain in operation as it works its way back onto a firm financial ground. In many cases, the best way for businesses to manage their debts is to do it through bankruptcy. A reorganizational Chapter 11 bankruptcy may allow a company and much of its leadership to stay together and find financial solutions without the threat of continued actions from creditors hanging over its head.

The restaurant company Cosi Inc. recently sought such protection with hopes of keeping many of its stores open and retaining its brand. The company’s decision to file for Chapter 11 bankruptcy comes after suffering reported revenue losses both in 2015 and through the fiscal second quarter of the current year. Under the direction of an interim CEO, who stepped after the company’s board fired the previous chief in August, the company has been attempting to sell itself through a process known as a “stalking horse” bid, in which it sets a floor for previously designated buyers to bid on its assets. In this case, however, disputes with creditors have threatened to disrupt the entire deal.  

A Chapter 11 bankruptcy may be what’s needed to help breathe new life into an organization, provided one has the right guidance in navigating its way through the filing process. Such guidance may be best provided by an experienced bankruptcy attorney.

Source: USA Today “Cosi restaurant chain files for bankruptcy” Bomey, Nathan, Sept. 29, 2016

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