Most Louisiana business owners understand that any number of issues can financially make or break a company. Many business owners try to expand their earning potentials and boost their overall productivity and profitability through mergers or acquisitions. Doing so often helps struggling businesses stay afloat — often, but not always. Others wind up filing Chapter 7 bankruptcy to obtain debt relief and start afresh.
A business in another state purchased another company through a bankruptcy auction. The deal was led by a millionaire who placed up the assets of the acquiring company as collateral to purchase the other. The plan has apparently not worked out so well because several other businesses have joined efforts to petition a forced Chapter 7 bankruptcy against the company that made the acquisition.
The company with the largest claim against the iron ore business says it is owed more than $4 million. A spokesman who handles external affairs for the business said the company made numerous attempts to contact the appropriate party at the iron ore company to collect payment owed on its electric bill. He also said that at some point, that party simply stopped taking or responding to the calls; therefore, electrical power to the iron ore plant was cut off.
The iron ore company apparently sent a message to the electric supplier somewhere along the line, saying it had planned to make a scheduled payment but was unable to do so because of unexpected issues that arose. A forced bankruptcy against the iron ore company could possibly cause a default on the loan that was obtained to acquire the other company at auction. Under forced Chapter 7 regulations, a business can often continue to operate under certain restrictions. Such situations can be complicated, which is why most Louisiana business owners facing similar dilemmas seek support from experienced debt relief attorneys.
Source: businessnorth.com, “Area firms seek to force ERP Iron into bankruptcy“, May 29, 2018