Many businesses have suffered the effect of the recession and have been forced to make some changes to stay afloat. Even after an enormous amount of effort, a company in New Jersey and across the United States still may not be able to make enough money through cutting costs and lay-offs. Companies that file for Chapter 11 may emerge from their difficult time stronger and with a more competitive edge.
Universal Cooperatives, Inc., a company that provides various services for the farming industry, recently filed for Chapter 11 bankruptcy protection. The company includes all five of its other owned businesses under the same umbrella. The company claims that it intends to sell the other businesses during this time.
It is not yet known if the filing is going to impact the 171 employees who work across all of the subsidiaries. The company requested that the court secure the payment of wages and benefits for the employees. This would allow the company to continue operating with cash flow while it works through the transition into Chapter 11.
Universal received financial support from Bank of America to continue operating and is expected to continue ordering from suppliers during the Chapter 11 process. The company owes nearly $8 million to its highest five creditors and greater than $10 million to another 25 creditors. It will continue operating through the process in an effort to come out stronger. New Jersey companies who are struggling may find it beneficial to file for Chapter 11 in order to become leaner and more attractive to a suitable buyer and look forward to a stronger future.
Source: Twin Cities Business, "Universal Cooperatives Files For Ch. 11 Bankruptcy", Kevin Mahoney, May 12, 2014