Any company can be prone to the effects of a declining economy. Many New Jersey businesses have been feeling the economic pressure and are behind on payments to their creditors. Filing for Chapter 11 bankruptcy can allow a struggling business to get back on its feet by reorganizing its debt and discovering more efficient ways to operate.
UniTek, a company that acts as an installer for many of the major cable companies, has recently filed for Chapter 11 bankruptcy. The company's CEO informed investors and the SEC that the company would go through a debt restructuring process. He also stated that going forward, UniTek would need to diversify its customer portfolio beyond the large companies that it works with now. Its largest customer, DirecTV is among other giants, such as Comcast and AT&T.
According to a report, UniTek owes $186 million to its creditors. Shares of the company's stock dropped down to a penny from a higher point earlier this year of $1.89 per share. Although the company reports making $400 million or more per year, it is still not in the black. Since 2008, the company has been reporting a loss.
Chapter 11 bankruptcy protection may be the first step toward a resolution for a New Jersey business that is suffering financially. Through the bankruptcy process, the company can examine and alter its operating practices as well as eliminate unnecessary costs. In addition to improving the way the business operates, these changes may also allow the business to look more attractive to a prospective buyer. By taking advantage of the Chapter 11 process, a company may be able to keep its doors open and find itself on a better financial track.
Source: philly.com, "DirecTV, Comcast installer UniTek is bankrupt (updated)", Joseph N. DiStefano, Nov. 3, 2014