If you have been reading our blog long enough, then you know that bankruptcy is not about counting your losses but protecting your assets and redistributing your earnings to do the most good for your financial future. You might also be aware that business bankruptcies –and what makes us feel so good about them—are also known as financial restructuring. Restructuring is what makes bankruptcies so helpful. But did you know that the miracle wrought by restructuring is a big enough deal in the corporate world that some of the most prestigious business schools in America have an annual restructuring competition? The American Bankruptcy Institute (ABI) recently hosted its 15th Annual Corporate Restructuring Competition. Each year, the event allows business school students to participate in a crisis management exercise. Seven prestigious business schools participated this year. Schools that participated this year include the University of Chicago Booth School of Business, Columbia…
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We have written extensively about how struggling businesses can benefit by filing for Chapter 11 bankruptcy. Over the years, numerous companies survived financial disasters by seeking Chapter 11 protections. Some of these companies are household names, such as American Airlines. American Airlines is the largest commercial airliner in the United States. Despite its history of success, the company experienced severe financial problems less than a decade ago. American Airlines was beset by numerous financial setbacks before its parent company, the AMR Corporation, filed for Chapter 11 bankruptcy in 2011. For instance, the company reported steep losses and major problems negotiating labor contracts with pilot unions. The company was also facing excessive debts and rising fuel prices. Many of these problems had persisted for years before the AMR Corporation sought protections under Chapter 11. In fact, the company narrowly avoided filing for bankruptcy in 2003. In 2011, facing a serious crisis,…
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Chapter 11 bankruptcy is often portrayed as an option that is limited to billion-dollar corporations. However, your local Kansas City business—no matter its size— can enjoy the same protections Chapter 11 provides for giant companies. Here are four ways filing for Chapter 11 can help a business get back on track. 1. Stay Open Many business owners think of bankruptcy as synonymous with closing. The opposite is true. If your business is on the verge of closing due to creditor actions or foreclosure, a Chapter 11 bankruptcy filing is the first step you can take to stop the actions creditors take against the business. Instead of marking failure, this Chapter of bankruptcy is specifically designed as a second chance for businesses, because it allows businesses to stay open while restructuring their debts. 2. Reclaim Control of the Quality of Products and Services With financial affairs restructured, the business has more…
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