A company in another state that manufactures batteries has been having some serious financial problems. Many New Mexico business owners can no doubt relate to that. When a business tries various ways to overcome such issues but proves unsuccessful, there are often solid solutions available by filing Chapter 7 bankruptcy, which is exactly what the battery company has done.
The company was supposed to forge an alliance with a Chinese company a few years ago, but it did not pan out. The failed deal was one of the final straws that prompted the decision to seek a complete liquidation of assets. This particular battery company is not the first one of its kind in the same city to file for bankruptcy in the past few years.
The other company chose to pursue a Chapter 11 program, which is different from Chapter 7. The latter, as mentioned earlier, typically involves complete asset liquidation, whereas the former is basically a restructuring maneuver that allows business owners to keep their doors open in many instances, while providing an alternate payment plan. To qualify for this type of reorganization plan, an individual or business must show that a reliable form of income exists that can be used to pay creditors.
The company that filed Chapter 7 bankruptcy had tried to make a go of it since 2003. Its plan was to generate high profits through an innovative battery design that combines carbon-based electrode power with the traditional lead-based technology. Things were off to a great start, and business analysts believed the company’s new product would revitalize the battery industry; however, when prospective partnerships failed to materialize, plans went south. New Mexico business owners considering filing for bankruptcy may want to consult with those who understand the legal implications.