Although financial analysts can’t agree on when the economic downturn will end, there is no doubt that it will. When the economy turns around and your business picks up, will your company be ready for prosperity? Using Chapter 11 bankruptcy New York businesses are setting the stage for future growth.
Companies Struggling to Stay Afloat
The recent economic troubles have affected everyone. Even recession-resistant industries have been hurt as their suppliers or other business partners are brought down by falling profits. Companies that were financially sound two years ago may be on the brink of failing today.
This is a source of frustration to business owners. They know their companies are strong but may be destroyed by events out of their control. Just like consumers, businesses have burned through savings, maximized credit and used every resource at their disposal only to see income drop while expenses remain the same or rise. Organizations that have slashed benefits or laid off workers may think they have no strategies left to stop the flow of money out of the company. For these businesses, Chapter 11 bankruptcy offers a second chance.
Time to Plan and Organize
Bankruptcy does not necessarily spell the end of a business entity. Although Chapter 7 means liquidating the business, under Chapter 11 bankruptcy an organization is given an opportunity to restructure the company’s debts and come up with a plan that will pay off the creditors and save the business.
In some cases, Chapter 11 bankruptcy may not help but this is because the business emerges from reorganization to the same economic situation it was in before. Without the ability to increase revenue or cut expenses, the business may simply be putting off the inevitable.
However signs point to economic recovery. This means a business that can hold on for a short time will see a return of former customer traffic, and increase in income, and a return to a profitable state.
Plan for Future Prosperity
No one can predict what the economy will be like in a few months, but most experts agree the worst is behind us. When the economy rebounds, organizations that are positioned to take advantage of this will reap the benefits.
Many companies will reach new levels of success. The grim financial landscape of recent months has culled the herd and many weaker companies have disappeared. This means fewer competitors and a larger slice of the market for each of the survivors. To take advantage of this new landscape, existing companies must endure with the help of Chapter 11 bankruptcy.
When a financial plan includes Chapter 11 bankruptcy, New York companies that are teetering on the brink of failure are given a second chance. It is a valuable tool that allows quality organizations to continue to serve the people of New York.