In a recent blog post, we discussed how Chapter 11 bankruptcy can help businesses or individuals restructure debts to create a more viable future. For businesses, Chapter 11 bankruptcy is often a beginning instead of an ending, and restructuring can mean the business stays open, shareholders have future earnings to look forward to and many employees keep their jobs.
A company providing commercial laundry services in Tennessee and several other states is seeing the benefits of Chapter 11 bankruptcy first hand. The company, Coyne Textile Services, filed Chapter 11 during the summer. The organization will be selling assets in October, but several of the company’s facilities will remain in operation under the Coyne name.
The business is selling three locations to two buyers. All of the locations being sold are outside of Tennessee. They are being sold to two competing laundry companies.
While restructuring debt, Coyne Textile Services is working with the bankruptcy court to create a viable plan and to avoid service termination. As of late September, the company had not reported any service terminations — always a good position for an organization that is in the middle of debt restructuring. Continuing to provide services means a continuation of cash flow, all of which makes it more possible to pay down restructured debt.
The company has nine locations, including the three that are being sold. There are 620 employees at those locations. With various locations being kept in operation by Coyne, at least some of those employees should remain on the job.
Business bankruptcy proceedings are complex. From workers to vendor contracts, many considerations go into planning a restructuring. Working with professionals that understand those intricacies helps business owners and operators seek a better future through legal bankruptcy.
Source: WCYB, “Coyne’s Bristol location has buyer, no plan to shut down,” Lenny Cohen, Sep. 28, 2015