According to the reporting from the Los Angeles Times, Payless ShoeSource has filed for Chapter 11 bankruptcy protection. The company, which is based in Topeka, Kansas, operates stores all around the country, including throughout the state of California. At least 400 stores are set to close nationally, with 30 closing in California alone.
The Mercury News reports that Sungevity, an Oakland-based renewable energy company, has filed for Chapter 11 bankruptcy protection. According to the report, Sungevity has laid off several hundred employees and now plans to sell itself off to Northern Pacific Group, a venture capital company firm based in Minnesota. This sale can only go through with approval from a bankruptcy court.
According to reporting from The Mercury News, Titans of Mavericks, LLC, a surfing events and lifestyle brand headquartered in San Mateo County, California, recently filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Central District of California. Court records and reports indicate that the company is attempting to use the bankruptcy process and the Chapter 11 bankruptcy protections to help ensure that its assets and intellectual property are able to be sold off to a new buyer.
Chapter 11 bankruptcy is also frequently referred to as a restructuring bankruptcy or as a reorganization bankruptcy. This is because the primary purpose of this type of bankruptcy is to allow the filing business to shed burdensome liabilities so that it can come out of the process on a sustainable financial path. Of course, actually getting through Chapter 11 and coming out in good shape can be difficult for any business. In fact, far too many businesses fail to ever regain stable financial footing. Ultimately, there is one specific challenge that all filing businesses face: The ability to access capital for post-filing business operations.
California businesses that file for bankruptcy protection are generally granted an automatic stay. In simple terms, an automatic stay provides the filing business with temporary relief from debt collections efforts. This includes relief from creditors that are seeking enforcement a judgment, foreclose on a property or the collection of debt in any other manner. Creditors are legally obligated to put all of those collection efforts on temporary hold. This is extremely useful for the filing company as it gives that business some space to devise a workable restructuring plan. However, creditors do not always abide by the automatic stay. If your company has been granted an automatic stay, and a creditor is continuing to take collection action, you need to speak to an experienced San Jose business bankruptcy lawyer immediately. Your company's legal rights are being violated.
According to reporting from Business Insider, La Paloma Generating Co LLC, a California power producer, has filed for Chapter 11 bankruptcy protection. A representative from the company told reporters that the current market conditions and regulatory environment made it impossible for the natural gas plant to operate with its current debt load. The company has at least $524 million worth of outstanding debts. As such, the McKittrick based power plant will now enter Chapter 11 bankruptcy proceedings with the goal of shedding some of its burdensome financial obligations so that it can come out of bankruptcy on a more stable financial footing.
Recently, the Supreme Court of the United States heard oral arguments in the case of Czyzewski v. Jevic Holding Corporation. This case involves a dispute over commonly used Chapter 11 bankruptcy settlement procedures. More specifically, the question at stake is how much power individual bankruptcy courts will have to approve bankruptcy settlements that deviate from the typical order of creditor preference.
In October of 2015, the Los Angeles-based clothing brand American Apparel filed for Chapter 11 bankruptcy protection. By February 2016, the company had exited bankruptcy and was hopeful for the future. This occurred after the company got its creditors to approve its $230 million reorganization plan. The plan swapped large amounts of debt for equity. Unfortunately, less than a year later, it appears that the restructuring plan was inadequate to meet the financial challenges facing the company. According to Bloomberg news, American Apparel has once again filed for Chapter 11 protection.
According to recent media reports, Samson Resources Corp has a signed an updated reorganization agreement in hopes of exiting the Chapter 11 bankruptcy process. The oil and gas drilling company originally filed for Chapter 11 bankruptcy protection in September of 2015. However, since that time, the company has been in a battle with some of its creditors over its restructuring plan. The company hopes that its revised Chapter 11 reorganization plan will finally get approval from objecting creditors or alternatively allow it to defeat them in bankruptcy court. Once either occurs, the company will be able to move forward in the Chapter 11 process.
Chapter 11 bankruptcy is to designed to help companies reorganize their obligations so that they can emerge stronger and healthier. If a business is going to keep operating after going through bankruptcy, then it is critical that the company is able to keep important talent. If too many key employees leave during the restructuring process, the company will have a much harder time going forward. The entire purpose of reorganizing may be undermined. An experienced San Jose business bankruptcy attorney can help your company devise strategies to retain important executives.