Financial stability is one of the most important aspects of a successful business. However, factors such as debt accumulation can greatly affect the stability of many companies. Louisiana business owners should be aware of their legal options when dealing with serious financial problems. In some cases, filing Chapter 11 bankruptcy can help alleviate this burden and save a failing business. The owners of a large tech company called Avaya recently made the decision to file.
The multi-million dollar tech company Avaya averages around one billion dollars per year. However, it has accumulated about seven times that amount in debt over the course of its existence. This led the company to file for Chapter 11 bankruptcy in 2017. While some with ties to the company feared the consequences of such an action, supporters of the filing believe that it will ultimately benefit both the company and its customers.
Avaya began as a hardware company and sought to restructure itself as a software company. Representatives stated that filing for Chapter 11 bankruptcy was the most efficient way for Avaya to achieve its goal without the need to refinance and pay heavy interest fees. This decision also allowed the company to continue serving its customers as the transformation takes place.
Knowing the legal options available is the first step to regaining financial stability for a company in distress. Any Louisiana business owners who are facing overwhelming debt problems might also benefit from filing Chapter 11 bankruptcy. Consulting an experienced bankruptcy attorney can help owners determine the best solution for their company.
Source: networkworld.com, "Avaya's Chapter 11 filing sends waves of disruption", Guy William Clinch, Feb. 10, 2017