When Louisiana business owners find themselves owing a significant amount of money with no way to easily pay it off, they may worry about having to shut down their business. This may not be necessary, however. One alternative owners could investigate is Chapter 11 bankruptcy, which could save them from having to close stores. News sources indicate that clothing retailer Rue21 will likely make utilize this method to regain financial stability.
Businesses that file Chapter 11 bankruptcy do not have to shut down or liquidate all of their assets in order to pay off their debts. This form of bankruptcy allows companies to restructure their finances while paying their debts. It also gives businesses the chance to keep their doors open to continue providing services to consumers.
Reports state that Rue21 is about $1 billion in debt. At this time, Rue21 has not yet filed for bankruptcy. However, a representative of the company has indicated that this is a likely scenario in the near future. The company is currently working to improve operations and has begun interacting with lenders and bondholders to figure out the best avenue for restructuring.
Louisiana business owners who want to start the process to regaining financial stability should consider all of the options available. An experienced bankruptcy attorney could assess individual situations to determine whether Chapter 11 bankruptcy is the right choice for a company facing overwhelming debt. In addition to advising clients, an attorney could also provide more information about bankruptcy and help owners navigate the filing process.
Source: al.com, “Teen clothing retailer Rue21 preparing for bankruptcy: reports“, Lucy Berry, April 7, 2017