Executives at HHGregg, a well-known retailer of appliances and electronics, recently announced the company has filed for bankruptcy. The Chapter 11 bankruptcy filing came a few days after the company’s announcement that it was closing of 88 of its stores in 15 different states. If companies in the state of Massachusetts and other states are struggling to stay afloat financially, filing for bankruptcy may be a viable option for them.
HHGregg recently allowed another party to buy its assets. By selling its assets, the company will be able to exit its Chapter 11 bankruptcy without any debt. The company will also experience a major improvement in its liquidity, which will enable the business to be more financially stable in the future.
The company’s executive said it spent the past 12 months exploring all of the business’s options, including alternatives to Chapter 11 bankruptcy. However, executives determined that a Chapter 11 bankruptcy filing would be best for ensuring the long-term success of the company. Not only will it benefit the company financially, it will help the retailer to support its vendors and associates.
Sometimes economic hardships are difficult for companies to overcome, and their liabilities end up outweighing their assets. Through Chapter 11 bankruptcy, however, companies can reorganize their businesses and restructure as well as eliminate debt, which will enable them to continue to operate in the years ahead. An attorney can provide guidance on how to navigate this type of bankruptcy filing and how such a filing may be beneficial considering the unique circumstances of a business in Massachusetts.
Source: usatoday.com, “HHGregg files for Chapter 11 bankruptcy, finds buyer“, Justin Mack, March 7, 2017