Even some of the largest corporations in the United States could run into challenging financial times. Revlon, a giant in the beauty products industry, recently filed for Chapter 11 bankruptcy. Some might believe the company will fold, but that might not be the case. Instead, the company may find its way out of bankruptcy on better footing and continue to provide products to Texas retailers.
Revlon runs into logistical problems
Like so many other companies, Revlon now struggles with supply chain problems. Revlon expects to receive $575 million in debtor-in-possession financing to cover daily operations, but the funding might provide only a short-term solution. More debt might be troubling for a company that can’t function properly due to supply chain woes.
Revlon is not the only major company to deal with financial troubles, but it currently ranks as one of the largest companies to file for bankruptcy protection in recent years. Perhaps other top names in the retail industry might follow until the supply chain crisis, and other economic stressors receded.
Chapter 11 bankruptcy and businesses
Chapter 11 bankruptcy follows a reorganization plan designed to help the debtor deal with creditors. Additionally, the debtor continues to operate the business. Chapter 11 business bankruptcy might help the company stay in business while dealing with and addressing a massive debt load.
Bankruptcy protection could help the economy by helping a business avoid closing its doors. Employees may keep their jobs, and the company’s valuable goods and services might continue their way to the market.
Upon entering bankruptcy, the company must adhere to certain rules. Management must accept oversight from the court. For example, any future borrowing may require the court’s approval. Hopefully, the business can navigate bankruptcy and exit the proceedings on a decent financial footing.