A local business has filed Chapter 11 to take advantage of the law's provisions that allow it to continue operating while it reorganizes its finances. Edge Rubber is located in Chambersburg, and the filing occurred in the U.S. Bankruptcy Court for the Middle District of Pennsylvania. The company does recycling of tires. Its spokesman stated that the business hopes to come out of the bankruptcy in stronger shape and with a larger base of operations.
A business or non-profit entity that is burdened with personal injury litigation may find it critically helpful to file a Chapter 11 bankruptcy in order to compensate victims and put an end to future litigation. This has proved particularly applicable to the situation of the local churches affiliated with the Roman Catholic Church, where a local diocese may be able to settle and resolve all of its claims generally in one fell swoop. The use of mediation in a bankruptcy proceeding may generally bring all of the victims to separate settlement tables and provide a convenient and final arbiter of numerous personal injury claims. This remedy can apply in Pennsylvania as well as all other bankruptcy jurisdictions.
A Pennsylvania business could file bankruptcy so that its chief officers can attempt to reaffirm control over a restructured company. This may include a new, reduced debt load, new financing and an organizational revamping of management. An example of this occurred in another state recently when the owner of a daily newspaper, along with new investment partners, announced plans to bid for control of the business, which is currently in a Chapter 11 bankruptcy.
Surprisingly, a study sponsored by the U.S. Small Business Administration found that many small businesses with less than 500 employees that went into bankruptcy were rejuvenated as successful business ventures within seven years of the bankruptcy discharge. The purpose of the Bankruptcy Code with respect to small businesses in Pennsylvania and elsewhere is to give them a set of remedies that will help them pull out of financial difficulties and move forward to become successful. Chapter 11 is the usual choice for a small business that wants to remain operational during and after a bankruptcy.
In Pennsylvania and all other jurisdictions, when a business encounters disruptive disputes with a major creditor, the company may attempt in some circumstances to resolve the issues by filing a Chapter 11 petition. That is the general intent behind a recent Chapter 11 bankruptcy filing by a business entrepreneur and his wife in another state. The bank, Wells Fargo, has obtained an order providing for a receiver to liquidate the companies in which the couple have an ownership interest and to pay the bank with the proceeds.
When a business in Pennsylvania or elsewhere files a Chapter 11 bankruptcy reorganization case, there are several key benefits that it may legally pursue in its own behalf. Importantly, the business does not have to close its doors and may continue operating during the bankruptcy. In some cases, it may even be successful in raising new financing to replenish the company's financial coffers during the Chapter 11 proceeding.
Residents of Pennsylvania may be interested in the financial problems of Curtis James Jackson III -- better known as the rapper 50 Cent. He recently filed for the protection of bankruptcy in another state. This filing followed only a few days after a jury in another court ordered Jackson to pay $5 million for violating the privacy of the ex-girlfriend of another rapper. That lawsuit arose from a 2009 incident in which 50 Cent posted a sex video involving the woman on his website.
The 12th largest coal producer in 2013 was Patriot Coal Corp., a company that recently filed a Chapter 11 bankruptcy for the second time in three years. This time Patriot intends to sell the majority of its assets, keeping only some mining operations. It has announced that Blackhawk Mining LLC is offering to buy the majority of the assets for a bid of $643 million. The company operates in a neighboring state, and there could be some impact on workers and mining operations here in Pennsylvania from the Chapter 11 filing, but that information is not currently available.
One of the benefits of Chapter 11 for a Pennsylvania business is that the company generally can continue operating during the bankruptcy proceedings. During that time, it can attempt to devise a plan to restructure its debt and reorganize the company's financial and operational activities so as to emerge from the bankruptcy in good working condition. However, there are many factors to consider during the challenging dynamic of a successful reorganization.
When a company is in bankruptcy in Pennsylvania or any other jurisdiction, the debtor company must reveal the existence of all assets, including all real estate owned. The company cannot simply sell real estate or other assets without court approval. In one Chapter 11 case, a developer from Montgomery County allegedly sold a property while it was still in the bankruptcy without pre-approval to do it.