New York businesses are not immune from changing technology, consumer demand and the fluctuating economy. Many factors influence how successful a business can be. Sometimes even with the smallest of changes or challenges, businesses can no longer operate in the black.
When businesses are facing financial challenges, they have the option to file for bankruptcy. A business bankruptcy can sometimes help businesses reorganize and return to the market stronger than ever. In other situations, a business bankruptcy can help a New York business with significant debt windup prior to closing. In either case, a bankruptcy can be a successful legal strategy.
Recently, a 157-year-old New York business has announced that it will enter into Chapter 11 bankruptcy. The company sells metal fasteners to the automotive, aerospace and defense industries. The company is famous for making parts of the airplane that Charles Lindbergh used in the world’s first non-stop flight across the Atlantic Ocean in 1927.
Since then, however, the business has faced some financial challenges. The company has 55 unionized employees who have been working without a contract since 2011. Contract negotiations have apparently stalled. The company has also faced a legal dispute with its landlord over damage that stopped production. Furthermore, the company says that its profits have decreased with the economic downturn.
Overall, the company claims to have $5.5 million in debt and only $8.5 million in assets. The company is hoping Chapter 11 bankruptcy will give it the opportunity to negotiate with potential buyers. However, employees have been notified that the 65,000 square foot plant may close altogether.
Businesses that are considering Chapter 11 bankruptcy should understand the benefits and disadvantages. With the right help, however, a business bankruptcy can be a good choice for New York businesses that are struggling to meet all their demands.
Source: Newsday, “Company that made parts for Lindbergh files for bankruptcy,” Maura Mcdermott, May 1, 2014