In many cases, when liabilities become more than assets it is a good time for a business to look into what debt relief options may be available. In some cases this leads to the complete liquidation of a business, but in others it can mean the time to reorganize and build up a foundation for a stronger financial future.
In an effort to reorganize, Broadview Networks Holdings filed for bankruptcy. The plan is this will allow them to have the proper capital structure in order to move forward with business plans and objectives.
The communications and technology provider/operator filed what is known as a pre-packaged Chapter 11 bankruptcy. With this type of bankruptcy, there is already an agreement between shareholders and creditors. The idea is this will help reduce the amount of time needed to actually reorganize finances. If all goes as anticipated, the company plans on being done restructuring by the end of this year.
This filing also came after the company explored restructuring, merger and refinancing options.
According to the filing, for the first quarter the business listed $258.3 million in assets and $373.4 million in liabilities.
In general, when it comes to business bankruptcy there are a number of different routes to take. However, each one will end up having different implications and different outcomes. An attorney with experience in bankruptcy can learn about a business' specific interests and make suggestions from there.
To learn more about how our firm handles bankruptcy, please visit our business bankruptcy page.
Source: Reuters, "Broadview Networks files for pre-packaged bankruptcy," Nate Raymond, Aug. 23, 2012