Businesses in Texas and throughout the country must weather all manner of financial ups and downs if they want to remain competitive and successful. Sometimes, when a financial shock take place wherein the business finds itself burdened with overwhelming debt, Chapter 11 bankruptcy is a tactic many use to reorganize and emerge as a player in the market once again, unhindered by those debts.
Recently, one Texas energy company demonstrated how this is done. EV Energy Partners shed over $350 million in debt through Chapter 11. The company now emerges from bankruptcy as Harvest Oil. With $297 million in debt remaining, and $325 million in available credit plus just over $20 million in cash, the company's liquidity is over $45 million.
Harvest has assets in oil fields throughout the country, from Texas and Louisiana to Michigan and the Appalachian basin. The diversity of this asset base is in part what the reorganized company is relying upon for its financial future. This is a key question in Chapter 11 bankruptcy: will debt reorganization help the business return to competitiveness? A court will need to approve of the reorganization plan before a discharge of debts can be obtained.
Whether the business in question is a large energy company or a mom-and-pop store on a corner in Tyler, bankruptcy is an important legal option when debt threatens the future of the business. Business owners struggling with unmanageable debts may want to determine whether Chapter 11 bankruptcy and reorganization is a feasible option. If so, it may provide a means for a business to move forward into a brighter financial future.