Some law firms hold themselves out as deeply skilled in the counsel they provide business clients concerning Chapter 11 corporate bankruptcy, when in fact they don't have a particularly strong focus on that practice area.
We feel empowered to speak about Chapter 11 bankruptcy at the Manhattan law firm of Rich Michaelson Magaliff Moser, LLP, for many reasons. As we duly note on our website, "we have represented clients in the New York City area, Delaware and nationally in some of the most challenging and visible corporate bankruptcies in recent years."
A Chapter 11 bankruptcy filing by a commercial entity in New York or elsewhere can certainly signal the end a business life span for a company that has simply become overwhelmed by debt and other problems over time.
As New York attorneys who work routinely with diverse commercial clientele on some of the most intricate and complex debt-related and restructuring matters possible, we flatly know that a Chapter 11 bankruptcy filing is far from being a boilerplate strategy and solution to seemingly insuperable financial challenges.
There are many viable options for diverse New York businesses seeking to overcome troublingly high debt levels, including Chapter 11 bankruptcy in select instances.
Financial hardship can befall any company. Maybe not necessarily at any time, but the concept still holds water. When a business starts to suffer financial, it is rare for the solution to be one-dimensional. These problems are often far more complex than they seem, and the solutions often require a tactical approach from many different angles to properly implement.
A new report is out detailing the number of commercial bankruptcy filings there were in the 2016 calendar year, as well as the total number of bankruptcies in the US. The total number of bankruptcies were down by 6 percent -- but within that number, commercial bankruptcies increased a staggering 26 percent in 2016. In 2015, there were 29,920 commercial Chapter 11 bankruptcies. In 2016, that number surged to 37,771.
Avaya's consideration of a Chapter 11 bankruptcy filing exemplifies a growing trend in the tech sector right now: if you acquire a new company and that company suddenly becomes a massive financial weight without the competitiveness to relieve that debt, the asset may not be worth it.
When a business is facing a mountain of debt, it may file for bankruptcy. But what type of bankruptcy it files for depends greatly on the business type, the particular situation and what the business plans to do in the future. Having said that, there are three main bankruptcy forms for businesses.
A few weeks ago, we wrote about a sports equipment company, Golfsmith, going bankrupt. In that post, we talked about the declining popularity of golf, and how that has played a role in Golfsmith's bankruptcy.