When businesses face financial difficulties, they often have multiple options to consider when it comes to handling those difficulties. In some cases, attempts to remedy an issue may not go to plan, and the problems could continue. As a result, some businesses may need Chapter 11 assistance.
Louisiana readers may be interested in Deluxe Entertainment's recent Chapter 11 filing. According to reports, the company's bankruptcy petition indicated between $1 billion and $10 billion in debts and assets between $500 million and $1 billion. It also noted that one creditor alone was owed over $9 million. In hopes of rectifying the situation, the company is slated to be passed over to its debt-holders after a debt-for-equity swap agreement was created with some of its lenders. It was not detailed exactly how many lenders the company has.
The additional lenders got on board after agreeing that a court-supervised process would be in everyone's best interests. As a result, the company is moving forward with a prepackaged Chapter 11 case. The bankruptcy should not affect customers or employees, and the business operations are expected to continue as intended. The company's CEO stated that this action will provide financial flexibility without causing disruptions to business.
Chapter 11 bankruptcy could be the answer for companies struggling with substantial debt. Of course, it is important that Louisiana business owners thoroughly review their options before making a decision. In efforts to determine whether moving forward with bankruptcy is the right choice, interested parties may want to consult with experienced attorneys for insight into their particular predicaments.