A Chapter 11 bankruptcy is generally a reorganization procedure allowing a business in Pennsylvania or elsewhere to get rid of some of its debt and negotiate restructuring of other debt, thus perhaps allowing the company to keep operating with a modified debt structure. In some instances, particularly those in which a company has planned carefully in advance and has the assistance of experienced bankruptcy counsel, it may file for bankruptcy and continue to operate straight through the process, coming out of the bankruptcy in a stronger economic position than before. Another benefit of a Chapter 11 filing is that a company may continue to operate without interruption of its business affairs and without a shutdown of its retail outlets.
A company with two main locations in Pennsylvania has filed a Chapter 11 bankruptcy with a plan that will reportedly restructure its long-term debt and let the company emerge from bankruptcy better than before. The plan involves infusions of additional capital into the company, which owns Anchor Hocking, by its secured creditors. In return, it appears that those creditors that invest will obtain ownership interest in the company.
The company expects to emerge from the bankruptcy in 60 to 75 days with reduced debt and increased capital backing through the investments made in the company by its secured creditors. That is a propitious outcome for a business that is having trouble staying afloat and staying open. Not all Chapter 11 proceedings end with a similar success stories.
Sometimes the attempt to restructure and reorganize debt in a Chapter 11 bankruptcy fails. This can happen for many different reasons, but usually it means that the company was too deep in debt to be able to reorganize and remain strong enough to go forward. In those situations, the debtor entity will file to convert the proceeding to a Chapter 7 liquidation. The leadership of Anchor Hocking, which is based in Pennsylvania, was commended by observers who believed that management was on top of the situation and very proactive in reorganizing in a strong manner.
Source: lancastereagle.com, "Anchor Hocking parent company to file bankruptcy", Jeff Barron, April 1, 2015