Businesses in Texas might recoil at the mere mentioning of the word "bankruptcy" even if they know that the future of the business might rely on getting the business and its debts back under control. What must be realized is that the decision to file for a business bankruptcy is one that is not a negative, but can be a positive to the future of the business and help to get back on a better financial foundation. One tactic that many businesses have used in the past to improve their situation is a reorganization under Chapter 11. Naturally, it is imperative to know the various consequences of this and whether it is the best possible option for the individual company.
A provider of autogas technology has filed for Chapter 11 bankruptcy in Texas. It is doing this to move forward with a debt restructuring. According to the company, there are between 200 and 999 creditors. Their liabilities fall between $10 million and $50 million. This information is part of the Chapter 11 bankruptcy process and is intentionally non-specific. The company also filed a motion to pay claims of "critical vendors" before the petition for Chapter 11. The hearing is upcoming.
Along with the Chapter 11, the company believes it will receive what is known as "debtor-in-possession financing." This will assist with the reorganization going smoothly. If the court approves, the company will be able to have enough liquidity from this financing and the money it still brings in to continue its operations while the Chapter 11 bankruptcy is in progress. The company's founder and current president says that the Chapter 11 bankruptcy is an effort to adapt to the world of alternative fuel production and they will be able to reorganize. While they are in Chapter 11, the business is planning to function as normal.
Those who are not fully acquainted with the process of filing for Chapter 11 bankruptcy need to be aware of the above-listed numbers and processes and what they mean. There are many different aspects to a Chapter 11 business bankruptcy whether the business is small, medium or large and all have to be fully grasped before making the decision that Chapter 11 is the right choice. Speaking to an attorney before making the final decision and having help with the process from start to finish is an imperative when seeking to achieve a satisfactory result.
Source: ttnews.com, "CleanFUEL USA Files Chapter 11 Bankruptcy," April 11, 2016