The Florida-based hearing aid retailer HearUSA filed for a reorganizational bankruptcy last week. Under this Chapter 11 bankruptcy the company will sell its assets for $80 million to the international hearing-care company William Demant Holdings, and 163 employees will be laid off. If all goes as planned, the sale with Demant will happen in just a few months.
The Chapter 11 bankruptcy filing and announcement that the assets were being sold were both made on the same day last Wednesday.
According to the interim chief executive officer for HearUSA, the company had explored many different financial options and solutions before coming to the conclusion that selling would be the best for not only the company, but also the stakeholders.
When looking back over the last year, in 2010 HearUSA had reported just $7.7 million on net losses of $83.5 million revenues. However, sales decreased over the past year, and last week when the bankruptcy was filed the company reported having $60 million in liabilities and $81 million in assets.
In addition to announcing the bankruptcy and sale, it was also reported that HearUSA plans on letting go 163 employees in July.
In general, this bankruptcy filing highlights the ripple effect that many employees have been feeling both during and after the recession. Just as people have been struggling financially, so have businesses. And, when a business is looking to cut back on expenses, often employees will be laid off, which only further cements the financial hardships felt by many.
However, in those situations where a person is out of the work, relying on credit cards and retirement accounts only makes financial problems worse. Instead a person should look into what other options are available that could help with their financial hardships.
Source: Sun Sentinel, “HearUSA to be sold,” Marcia Heroux Pounds, 18 May 2011