When talking about filing for bankruptcy, many incorrectly assume that the filing must come while the company is still in business. And while it is true that filing for bankruptcy while still in business can do a lot in terms of possibly saving the business, there are cases where a business files after it has already shut down.
An example of this would be Signet Solar. The company recently filed for Chapter 11 bankruptcy after closing two years ago.
In the case of Signet Solar, it appears the real issue with their business model was in fact the product being made. Signet Solar made thin-film solar panels. The panels were the amorphous silicon type. Interest in amorphous silicon had spiked in 2005 when there was a shortage of the main energy converting ingredient used in the more traditional crystalline solar panels.
But, the real issue was that the amorphous silicon panels could not compete with the crystalline solar panels. The amorphous silicon panels were simply not as efficient and were always more expensive. Then, when the crystalline solar panels started to drop in price, the amorphous panels just could not keep up.
With all of these factors working against amorphous panels, it came as really no surprise that Signet Solar was not able to stay open.
In this recent Chapter 11 bankruptcy, Signet Solar lists $30 million in assets and $9.8 million in liabilities.
Looking to the future, typically with a Chapter 11 bankruptcy, the hope is to be able to create a manageable plan to pay back what is owed to creditors. In the case of Signet Solar, this is rather significant as there appears to be multiple creditors. The largest creditor is owed $2 million.
Source: San Francisco Business Times, "Signet Solar finally files bankruptcy," Lindsay Riddell, Nov. 29, 2012