In a weakened company many businesses throughout the state of Florida are struggling, including GeoPharma Inc. Just last week the company even decided to file for Chapter 11 bankruptcy protection with the hope of reorganizing debts.
According to the business bankruptcy filing, Florida-based GeoPharma Inc. has anywhere between $1 million and $10 million in assets, but has somewhere between $10 million to $50 million in liabilities, better known as the debt owed to others. In fact, it’s believed that GeoPharma could even have anywhere between 200 to 999 creditors that would be eligible for distribution funds under the not-yet-created payment plan.
For GeoPharma this bankruptcy filing did not come to a shock to many, as the company was delisted by the NASDAQ stock market in June. After being delisted, the company also sold its headquarters building and a manufacturing subsidiary in an attempt on cut back on debt.
In addition, the U.S. Labor Department forced the company to pay back wages totaling $1.3 million to nearly 200 employees.
Looking to the future for GeoPharma it’s hard to say exactly what will happen. In general a Chapter 11 bankruptcy gives businesses the chance to have their debts more match the value of its assets.
Under this type of filing the business will come up with a new payment plan to reorganize its debts. This plan is then presented to creditors in a bankruptcy court, who will then vote on whether or not to accept those plans. Sometimes this process can take some negotiation, and other times there will be an immediate consensus.
Chapter 11 bankruptcy also works for both large and small businesses.
Source: Tampa Bay Business Journal, “GeoPharma files for bankruptcy,” Margie Manning, 25 March 2011