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Florida-based Acosta turns to Delaware for bankruptcy

In Florida, Acosta has entered into Chapter 11 bankruptcy. The packaged-goods marketing company filed for reorganization after it showed that changes in its industry and consumer behaviors had hurt its business.

The sales and marketing company based out of Jacksonville stated that it would file a reorganization plan to take around $3 billion of debt to equity. This plan would require the approval of its creditors. Interestingly, the company filed its petitions with the courts in Delaware, not in Florida where it is based.

Acosta claims that it has faced pressures that many retail outlets have struggled with, including losing consumers to online shopping. Acosta claims it has lost $631 million in revenue since 2015. Acosta also lost several of its key clients in July 2019, which hurt its liquidity and ability to pay down its debts.

With Chapter 11 reorganization, the company can protect its workers' jobs. Acosta currently employs approximately 30,000 people. This plan also allows creditors the best chance of receiving payment for the debts currently owed.

Chapter 11 bankruptcy can be of benefit to businesses

Just like in this case, if you run a company that is struggling to stay afloat but have workers you need to protect, you may want to opt for a Chapter 11 bankruptcy. Chapter 11 bankruptcies give you an opportunity to plan to emerge from bankruptcy in the green so that you have the profits you need to keep running your organization. Your attorney can talk to you more about Chapter 11 bankruptcy and if it could work for your business.

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