What happens after Chapter 11 is filed? Re-emerge or close?
In general, the goal of a Chapter 11 bankruptcy is to reorganize debt and re-emerge. Chapter 11 is still a great method to bring your business to a profitable enterprise. Now there is Subchapter V which is much more streamlined and less expensive.
However, not all companies re-emerge after filing a Chapter 11 bankruptcy. There are many factors to consider.
Chapter 11 Bankruptcy example that did not re-emerge.
Cache Update: Filed in 2015 and did not re-emerge. They could not find a buyer. Cache was forced to liquidate all of its assets.
There was an auction for the assets but no buyer for the company.
Many businesses that file for Chapter 11 Bankruptcy do re-emerge and become profitable again. However, that was not the case for Cache.
- Cache fell below the Nasdaq’s listing requirements.
- This upscale boutique was started by a Brooklyn-born housewife in Miami in 1976.
- This was Cache’s 2nd trip to Bankruptcy Court.
- Cache filed a Chapter 11 in 1986, re-emerged again in 1988 but could not survive its 2015 bankruptcy.
Cache was the first to bring the high end brands of Mugler, Armani and Versace to the U.S.
The shares tumbled 49% on January 22, 2015, reducing its market value to only $3 million.
It was not uncommon to see Cache listed as a creditor on individuals’ bankruptcy petitions. Unfortunately, we do not see Cache stores any longer.
I am sure their high end clothing is missed by many. Unless Cache re-emerges, there will be no more updates on Cache’s Bankruptcy.
Chapter 11 Bankruptcy Goal/Purpose
In general, the goal of a Chapter 11 bankruptcy is to reorganize debt and re-emerge. Chapter 11 is still a great method to bring your business to a profitable enterprise. Now there is Subchapter V which is much more streamlined and less expensive.
Be sure you understand the Chapter 11 process before you file Chapter 11 Bankruptcy.
Contact me if you need to decide if Chapter 11 NJ bankruptcy is the best option for you: Ralph A. Ferro, Jr., Esq. (201) 446-5904.
