Construction company John E. Bassett Inc. has decided to liquidate its assets in bankruptcy. According to a Chapter 7 petition the company filed in U.S. Bankruptcy Court for the Eastern District of North Carolina, the company estimates its liabilities at $1.2 million. Its biggest single liability amount is a $153,000 loan from BB&T that was received by a blanket lien on its assets.
The construction company is reporting its total assets at $240,000, significantly lower than the $1.2 million it owes its creditors. While the company reported $3.2 million in revenue in 2011 and $3.1 million in revenue in 2012, the company was on pace for just $2.7 million in revenue in 2013 based on its first quarter totals.
By filing for Chapter 7 bankruptcy, the construction company will be able to sell off any assets it has to pay off as much of the debt it owes while being relieved of any legal obligations to pay the remainder of its debt. If the U.S. Bankruptcy Court decides in favor of the construction company, John E. Bassett Inc. will take care of as much of its outstanding debt as possible with the remainder of its debt being discharged.
While Chapter 7 bankruptcy is certainly an option cash-strapped businesses can use to get out of debt, it is not a decision that should be taken lightly. Speaking to a bankruptcy lawyer will help you understand all of the different legal and financial ramifications associated with filing for Chapter 7 bankruptcy.
After you understand what could happen to a business and its credit rating after filing for Chapter 7, your attorney can file for bankruptcy on your behalf. This will ensure that you meet all deadlines and fill out all of the required forms to proceed with your bankruptcy filing.
Source: Triangle Business Journal, “Coastal construction company goes bankrupt,” Chris Bagley, April 25, 2013