After having more than $4 million in liabilities than assets, a company that catered toward meeting management and group incentives has filed for bankruptcy. The company, which specializes in performance incentive management, has been in operation for 25 years.
According to the recent Chapter 7 bankruptcy filing, HG Worldwide Inc. has $4.2 million in liabilities, but just $128,076 in assets.
And, in addition to owing into the millions, the company has also had a steady decrease in revenue over the past several years. In fiscal year 2009 HG Worldwide reported making $7.69 million. However, that number decreased in 2010 to $4.4 million, and then a reported $2.77 million in gross receipts for fiscal year 2011.
In a typical Chapter 7 bankruptcy a company will liquidate all assets to pay off creditors, and then the business ceases to exist and its debts are also all gone.
When looking at Chapter 7 as a debt relief business solution, it's important to remember that even though the business will most likely eventually close down, the good news is that at least there are no more debts and creditors will no longer be able to undertake any kind of legal action against the business that owes.
However, in situations where a business can realistically take care of debts and stay open, a Chapter 11 or Chapter 13 bankruptcy may be the best choice. With both of these bankruptcy options a reorganization plan is created in order to pay back creditors and consolidate the debt that is owed.
Source: Dayton Daily News, "Kettering company files for bankruptcy," Ben Sutherly, Aug. 9, 2011