Many business and commercial bankruptcies in Rockland County and elsewhere end up with the assets of the enterprise being sold to an investor who intends to reinvigorate the company and turn it into a profitable enterprise. The lure of purchasing a bankrupt company is the reduced price of the assets. On the other hand, rehabbing a bankrupt company can be very expensive and risky.
According to a recent report, a couple in Williamstown, New Jersey. bought a restaurant out of bankruptcy for $3.9 million. They felt that the restaurant's reputation and location on a busy intersection justified the price. The restaurant is on the Black Horse Pike between Philadelphia and the Jersey Shore. The new owners are busy rebuilding relationships with suppliers and renovating the physical structure.
Another investor purchased a casino in Atlantic City after it had completed its bankruptcy proceeding. The original construction cost was $2.4 billion, but the investor paid $200 million to acquire the company's assets from the bankruptcy trustee. He then invested another $200 million to upgrade the property. In addition to the greatly reduced price for the assets, the investor is relying on significantly reduced operating expenses to make his investment profitable.
People who have profited from buying businesses out of bankruptcy say that the two most important steps are to prepare a business plan and hire experts. An investor who purchased a defunct coal mine near Pittsburgh when coal was selling for $80 to $90 per ton reorganized the company and brought in a marketing team to find new markets for coal. Now coal is selling for more than $300 a ton, and the investment is becoming very profitable.