When a Texas company is having issues with its finances, it does not necessarily mean that the business that it operates is having a problem of its own making. It can also have to do with the company operating in a sector that is having overriding problems leading to a trickle down of struggles and making it necessary to consider options such as Chapter 11 bankruptcy. No matter the reason, seeking a reorganization under Chapter 11 is not something to be afraid of, nor is it anything to be ashamed of. It is simply a method of debt reorganization to get back on better financial footing or to wait for the industry situation to strengthen.
A company that provides helicopter transport services for offshore oil drillers recently filed for Chapter 11 bankruptcy. This decision was made after the company failed to make an interest payment of $46 million. This company is another in a long line of companies that has been negatively affected by low energy prices. Other businesses that have run into trouble include pipeline operators, companies providing rigs and explorers.
The helicopter company tried to cut its costs, but that failed. The company issued a statement saying that the reduction in energy prices has led to uncertainty and a reduction in demand for its services. In its filing, the company stated that it has a debt of $2.19 billion. It operates all over the world and will keep operating as the Chapter 11 proceeds.
For an economy that is so energy-centric like Texas’s economy, it is no surprise that a wide variety of companies are having problems making ends meet as the energy sector slumps. The current climate with energy has led to this downturn and the number of companies that are filing for Chapter 11 bankruptcy. Regardless of the type of business that a person runs, there is always a chance that various circumstances will arise making Chapter 11 a necessary maneuver to get the debts under control. Whether it is a large business, medium-sized or small, those who are facing the prospect of overwhelming debt should consider Chapter 11 with help from an experienced attorney.
Source: Bloomberg, “CHC in Bankruptcy as Oil Slump Hits Offshore Helicopter Service,” Dawn McCarty, May 5, 2016