Commercial Bankruptcy Case Study
A local candy manufacturer contacted the CGA Law Firm as they were experiencing grave financial problems.
The Company was having difficulty keeping up with payments to the bank and falling behind on its payments to its vendors. Sales and profitability, which at one time had been robust, were lagging, due to both industry related regulatory changes surrounding nutrition and obesity legislation and the general economic collapse that occurred post-2007.
CGA immediately stepped in and began negotiating with the candy manufacturer’s bank and suppliers in the hope of restructuring payments, making the debt affordable while the company continued to market its product. While we were looking for ways to preserve cash and lower debt payment, we also looked for ways to increase productivity and cut internal expenses. We also aided the candy manufacturer in looking for business partners that might be able to infuse capital or bring new product lines on board through the diversity of marketing efforts.
After being unsuccessful in arranging an outside of bankruptcy resolution because the bank and a prospective new business partner could not come to terms, we were compelled to assist the candy manufacturer into filing for Chapter 11. The Chapter 11 resulted in buying sufficient time to find a buyer on terms that the bank would accept. A sale was approved by the Bankruptcy Court and consummated shortly thereafter.
The result is that all of the 100 employees retained their jobs, the candy manufacturer is still a viable and recognizable presence in the York County business community, and with the infusion of new capital from the buyer, is even stronger today than had been at any time in the last five years.