A chain cupcake business based in another state recently decided that it needed to take drastic action in light of its dire financial situation. It thus decided to file for Chapter 11 bankruptcy. Companies in Massachusetts that find themselves with more liabilities than assets may benefit from doing the same in order to protect their best interests going forward.
In the out-of-state case, the cupcake company reported that its liabilities ranged from a million dollars to a total of $10 million. The company, called Gigi’s Cupcakes, is a FundCorp. affiliate, with the private equity group acquiring the cupcake chain back in 2016. Gigi’s asked that its bankruptcy filing be combined with that of Mr. Gatti’s Pizza, a second FundCorp. affiliate.
So far, Gigi’s has shut down multiple locations during the past few months. However, it is still operating sites that are under-performing. Gigi’s, which was founded back in 2008, once had over 100 locations throughout the United States.
Sometimes, debt can become a seemingly insurmountable mountain that a business in Massachusetts or other states simply cannot overcome on its own. In some cases, the debt situation is the result of a bad economy or perhaps a suddenly shifting industry. However, no matter what the reason might be for a company’s financial trouble, it may behoove the company owner to seek Chapter 11 bankruptcy protection as soon as possible. The benefit of this type of filing is that it allows companies to reorganize their debt and thus get back on the road to achieving financial success long term.