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Financial Trouble: Avoiding Business Bankruptcy

Small Business Owners Face Irrational Fears.

Recently, I was doing some cold calls and I came across meeting Bob, a small business owner in the furniture manufacturing business. Bob survived the great recession and was able to keep his business and 20 of his 60 employees. He was forced to dramatically downsize in late 2008 and 2009. During that time he borrowed on two major lines of credit and a few credit cards. He now sits on $146,000 in in credit card debt. He is operating a business now on half the revenue he had prior to 2008. In 2013 he had another setback. His largest customer filed bankruptcy and left him with a huge unpaid receivable leaving him in greater financial trouble. He did not know what to do. He stopped paying vendors and suppliers. He stopped paying his Wells Fargo line of credit and his Bank of America credit cards. He stopped communicating with them.

When I called Bob, I told him I had noticed that Wells Fargo had recently filed a lawsuit against him and the company. I asked if he thought he needed some assistance in resolving it. He eagerly said YES! I hope it’s not too late. He said his greatest fear was losing his business.

Bob and I met and I began to better understand his business, his creditors and reviewed the financials. Bob gave me power of attorney so I could speak with his creditors. This was a relief to Bob because he was spending all day juggling funds to get materials to make his furniture. He was spending all day dealing with creditors and not running the business. He was worn out.

Bob is now relieved because he has a professional helping him manage this terrible cash flow situation. By passing that responsibility to my firm, Bob no longer has to juggle cash flow. We do that for him. Immediately, we began working with Bob’s creditors to tell them that all new orders will be COD or CBD. Right now, until we can get our hands around the entire company financials, we cannot make any payments to the old debt. We informed the creditors that Bob has pending legal and collection issues and we told them that Bob’s biggest customer filed for bankruptcy and left him with an unpaid $400,000 receivable. We brought truth and integrity back to the business. The creditors were eager for the new COD business and agreed to wait until we have a plan for the past due balance. Bob is now stabilizing the business again.

This week we have settled the Wells Fargo line of credit lawsuit for a settlement of 33% of the balance owed to Well Fargo. Bob no longer has a lawsuit hanging over his head. We still have a lot to do to come up with the plan for his other creditors, but we are on the right path. Bob is now relieved he wont be going to Walmart this week for a greeter job. In the blog posts ahead, I am going to break down the steps a company takes to begin a successful a turn around.

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Our firm utilizes proven and contemporary B2B dispute resolution, payables management and restructuring techniques that are designed to save the business and avoid bankruptcy.