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Some companies use Chapter 11 bankruptcy as a defense

Creditors can be demanding to the point that a Florida company must begin to consider strategic legal and business moves in order to remain intact. One creative option that some companies use is Chapter 11 bankruptcy. During the proceedings, creditors are kept at bay, which provides the companies that file the time they need to reorganize their finances.

This is what an almost 100-year-old recycling and trash company in New England is doing. The company recently filed for Chapter 11 bankruptcy, but not because its owners consider it to be in financial distress. The company has a creditor that was demanding to take possession of some of the company's property, and the owner did not want that to happen. He sought the protections provided by the U.S. Bankruptcy Code, including the stay that halts all collection activities by creditors.

Another oil and gas company files for Chapter 11 bankruptcy

When oil prices dropped below $30 a barrel, however briefly, it had a significant impact on the oil and gas industry. Many of the country's oil and gas companies experienced financial difficulties, and some filed for Chapter 11 bankruptcy. Florida readers might not be surprised that the latest of these is SandRidge Energy.

The financially distressed oil and gas company was busy working out a restructuring plan with its creditors prior to filing its petition. In its petition, SandRidge claimed to have approximately $4 billion in debts and $7 billion in assets. The plan would allow the company to turn nearly $3.7 billion of its debt into equity.

Business litigation heats up between Groupon and IBM

Nearly everyone in Florida has heard of both IBM and Groupon. IBM has been a recognized brand for decades, and Groupon provides discounts to its members for a variety of products and services in its customers' geographic locations. However, it is safe to say that not everyone has heard that the two companies are involved in business litigation surrounding the use of each other's patents -- and it is heating up quickly.

A couple of months ago, IBM filed a lawsuit alleging that Groupon violated some of its patents. In response, Groupon filed a lawsuit alleging that IBM is infringing on its patents. In its suit, Groupon refers to IBM as a "dial-up era dinosaur" that is using its patents in an attempt to revive its company and shed its reputation as a relic in the technology business.

Another retailer seeks Chapter 11 bankruptcy protection

Many retailers here in Florida and across the country have been hit hard in recent years due to the recession and the housing market crisis. Aeropostale recently filed for Chapter 11 bankruptcy protection after its plans to turn around the company did not turn out as anticipated. A dispute with one of its largest suppliers made it necessary to take more drastic measures to ensure the future of the company.

According to court filings, the company has $390 million in debts and only $354 million in assets. Crystal Financial LLC has agreed to provide the retailer with bankruptcy financing in the amount of approximately $160 million, so that the company can continue to operate and pay its employees. However, that may mean that some of the company's 739 stores in the United States will need to be closed in order to save the company.

Not all mergers pass regulatory scrutiny

Halliburton, the world's second largest oilfield services company, is going to be writing a check to Baker Hughes, but not because a deal is going to happen. Florida readers might have been aware that Halliburton was going to purchase the smaller company for $28 billion. However, like some other mergers, the deal just could not pass regulatory scrutiny here in the United States, as well as abroad. 

The two companies decided to cancel the merger due -- at least in part -- to a lawsuit filed by the U.S. Department of Justice. The suit alleged that the merger would only leave two oilfield services companies to dominate the industry. In fact, the combined worth of the two companies when the merger was first announced ($34.6 billion) would actually exceed that of the largest provider, which is Schlumberger.

Timing is essential when it comes to corporate restructuring

Part of being a perceptive business owner is being able to look ahead and make any changes necessary to give the company the best chance of success. In some cases, that means knowing whether corporate restructuring is needed in order to keep the business going. Many Florida businesses encounter financial setbacks at one time or another, and the trick is figuring out the best way to deal with those setbacks.

Determining how much restructuring will be needed can be a daunting process. In many cases, it is not necessary to go to extremes in order to turn things around. Restructuring debts, selling assets and eliminating processes that are not contributing to the success of the business can all help give your company a chance to thrive. Determining the best course of action will most likely require the assistance of an attorney and perhaps other advisers.

PacSun becomes latest mall retailer to file Chapter 11 bankruptcy

In the last few years, brick and mortar retailers in malls around the country and here in Florida have come up against a common problem -- trying to compete with the increase in online shopping. Many of those retailers have turned to Chapter 11 bankruptcy in an attempt to restructure their businesses in order to remain alive. Pacific Sunwear of California Inc. recently became the latest mall retailer to file for bankruptcy protection.

PacSun's problems began in the 2000s, but an online presence was not the only challenge facing the company. The skate and surf styles the company was known for have fallen out of grace with younger consumers. When new leadership was introduced in 2009, positive changes were made to fix the problem. However, rapid expansion and high rental rates made those changes inadequate for saving the company.

Dispute resolution might not completely satisfy either party

Florida companies who have disputes with other companies can turn to the legal system to help resolve their issues, but there is a caveat. There is not always a clear winner even if the resolution appears to be fair. Whether the matter is resolved through alternative dispute resolution -- such as mediation or arbitration -- or through the court system, there is a possibility that neither party will be completely satisfied with the outcome.

For example, a county in another state filed a lawsuit against a construction company because there were numerous deficiencies in the courthouse the company was contracted to build. There were cracks, mold and other issues that had to be addressed nearly from the day the project was completed. The county has spent approximately $8 million repairing the building.

Google wins business litigation on appeal

Any time a Florida company enters into litigation, there is the chance that the court could rule against it. If that happens, it might be possible to appeal the decision to a higher court. In some cases, the lower court's decision in business litigation is overturned, and in other instances, the case is remanded back to the lower court for further consideration. Either way, the company is not necessarily bound by the trial court's original decision.

Take, for instance, a case filed against Google for patent infringement. The company that owns the patents that the internet search giant is accused of infringing is considered to be a patent troll in the tech community. SimpleAir filed has filed similar cases against other tech giants such as Microsoft, Apple and Amazon, among others, over patents for "push" notifications.

Company uses stalking-horse bid in Chapter 11 bankruptcy

When a Florida company intends to sell its assets at auction in a bankruptcy, it can be difficult to know what kind of interest the sale will receive from bidders, along with an idea of how much bidders are willing to spend. A stalking-horse bid might be used in order to test the market, avoid low offers and otherwise maximize the sales price when the auction takes place. This is what Jumio, an online identification verification company, has done in its recently filed Chapter 11 bankruptcy.

The company's former management team put it under investigation by the federal government in connection with suspicious stock sales and financial irregularities. The new management team claims that this caused the company to encounter obstacles to new funding. Therefore, filing for bankruptcy protection will provide the change to restructure the business and get back on its feet.

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