Running a business is no easy task. Unfortunately, some companies in Louisiana and around the country may struggle more than others or find themselves suddenly facing insurmountable financial issues. Though it can be immensely challenging to find ways to address outstanding business debt in effective ways, Chapter 11 bankruptcy can often help struggling companies find viable solutions.
Sungard Availability Services, an IT production and recovery company, recently made plans to file for Chapter 11 bankruptcy after accumulating a considerable number of liabilities. According to reports, the company owes approximately $1.3 billion to various creditors, and the hope is that the bankruptcy process will allow the company to lower its debt by over two-thirds. It was noted that 75 percent of the company’s secured lenders had already indicated that they would agree to the bankruptcy plan.
Company representatives believe that the business will be able to continue its operations throughout the proceedings and that it will reach the other side soon after the petition is filed. A credit facility has funded the company $100 million to keep up daily operations. One individual with the company believes that taking this route will provide the company with the opportunity to get back on track.
Though filing for Chapter 11 bankruptcy may seem intimidating to business owners, including those in Louisiana, it can have its benefits. As this case shows, the process may be able to help businesses reduce debt while continuing to operate. If business owners are interested in taking this type of debt relief route, they may wish to consult with knowledgeable attorneys on the pros and cons of this option.