The recent U.S. economic downturn has left many businesses, large and small, struggling to stay afloat. You may be concerned about how your company will survive and how to get it back on stronger financial footing. Operations that have worked for many years no longer make sense, funding that seemed sound is now weighing you down and what was once manageable now keeps you up at night.
So far in 2020, New York City business bankruptcy filings are up 40%. Many of these companies will be forced into liquidation. In the 2008-2009 recession, General Motors, Six Flags and Chrysler all filed Chapter 11 and came back strong. How did they do it? Strong management, planning and advisors. You can recover as well but only if you act in a timely manner.
Some of the warning signs your business may need to restructure:
- The business is struggling to meet its payroll obligations.
- The business is experiencing continued decreases in cashflow.
- The business is struggling to meet its debt obligations.
- The business is receiving calls from vendors and suppliers about past due payments.
Under the new Small Business Reorganization Act, it may be possible to restructure your debt, retain ownership of your company, discharge debts and retain ownership of your company while keeping your business operating and profitable. A skilled lawyer can help you throughout the process. And during the Chapter 11 process, your business will have the benefit of the automatic stay, which enjoins creditors from, among other things, commencing actions, collecting debts and taking other actions against the company.
Reorganizing your company is a process. To successfully achieve your goals, you need to work with professionals that have experience, knowledge and understand the needs of your business.