American Airlines, Kodak, General Motors; household names with one crucial thing in common — all three have filed for Chapter 11 reorganization.
General Motors filed in 2009 along with Chrysler as part of the U.S. government bailout following the 2008 economic crisis. AMR Corporation, the parent company of American, filed in 2011 and Kodak followed shortly after in 2012. Each company returned to profit following its reorganization plan.
The process differed for each company, but the fact stands that each needed to restructure to sustain business operations. Your company could also come back from a bankruptcy filing with a new perspective and new plan in place. It’s not as simple as a new business model, but you have options to rework your business after filing Chapter 11.
Some common advice after filing for Chapter 11 bankruptcy is to identify which factors contributed to the financial problems. Sometimes it’s a one-off incident such as a lawsuit or personal pressures. Other times you need to consider the bigger picture of your business to redirect its future.
Your business may need more restructuring than others to emerge from Chapter 11 and go on to succeed. Kodak’s reorganization plan included majorly changing its products and services. The over 100-year-old company phased out production of personal digital devices in its efforts to focus on businesses as customers.
The core of your company can remain after reorganizing, but it is worth the time and work to consider new efforts to bounce back after completing a Chapter 11 plan. One advantage is that you can work on a new plan without the pressure of repaying past debts in the early phases of reorganizing.
New ideas will show the court that you are ready to come back from Chapter 11 with a reasonable plan for your company’s future. Your company can thrive under a newly imagined business plan without the added pressures of debt collectors and major time constraints.