There may be many reasons a company, corporation or other business entity suffers from financial hardship. Whether it's due to declining sales, intense competition or any other reason, Louisiana owners likely have multiple options available to deal with such stresses. A common choice among proprietors across the country, such as gun manufacturer Remington, is to file for Chapter 11 bankruptcy.
Remington owners stated that the company began seeing a decrease in profits over the past couple years. Additionally, lawsuits and recent controversy surrounding the company's products, particularly semi-automatic rifles, caused investors to distance themselves from the business. These factors all contributed to the decision to file for bankruptcy.
Through filing Chapter 11, the company will get a chance to reorganize its finances. Owners have reached a financing deal with lenders that will reduce the company's debt by about $700 million. It should also add about $145 million in new capital. This will also allow Remington to remain operational while completing the bankruptcy process.
Most business owners that turn to bankruptcy to solve fiscal problems typically choose Chapter 11. Unlike other forms, this one -- once court approval is obtained -- provides the opportunity to restructure the monetary aspect of the business while keeping doors open to service consumers. Due to the complexities of the legal process, most owners choose to consult with experienced Louisiana bankruptcy attorneys for guidance. By creating a plan to pay back and fully eliminate debts, proprietors have the chance to give their businesses a fresh start economically and continue to prosper in the future.
Source: USA Today, "Gunmaker Remington reaches deal to operate while in bankruptcy", Feb. 13, 2018