Business, lifestyle, and operations restrictions caused by the coronavirus pandemic resulted in many businesses in Florida and elsewhere in the country filing for bankruptcy, or becoming dangerously close to doing so. Several different industries may resort to financial reorganization to try to come back to normal or stay afloat during these difficult times.
Prominent brands face serious financial problems with no end in sight
Hertz is a well known car rental company with its corporate headquarters in Estero, Florida. They laid off about 10,000 workers during the pandemic and have approximately $17 billion in debt which was re-negotiated with creditors. They have already retained legal help to explore their options and try to make up for severe losses due to used vehicle depreciation.
The cruise line industry in Florida is also in jeopardy and its future remains uncertain. Carnival’s Diamond Princess cruise ship caught international attention when several hundred guests and crew members tested positive for coronavirus. Plans to resume cruising seem to keep getting pushed back, and the CDC’s guidelines for cruise companies to begin operating are very restrictive, which may make any sailings in the near future unrealistic.
The retail sector as a whole was also put in a dire financial situation due to forced closures, as many of these businesses were already struggling in recent years. Their sales were down by 16% when compared with the month of April of 2019. Several well known brick and mortar chains such as J.C. Penney and Neiman Marcus have already started the process to file for Chapter 11 protection.
The oil industry has a strong presence in the Gulf of Mexico and southeastern United States. Decreased demand because of less travel and less driving caused oil prices to drop rapidly, and many other kinds of losses also hit the industry due to lower prices and diminished demand. Houston, Texas based Diamond Offshore Drilling had begun their Chapter 11 filing at the time of the news report.
Some businesses analysts have started to watch states that are lifting restrictions and stay at home orders. They should have a better idea in the coming months of how these businesses can begin to rebound, or if customers will be confident enough to return. Commercial bankruptcy filings were already 26% higher in 2020 than at the same time in the previous year. This represents over 560 businesses that have already started the process in the last several months.
Why is bankruptcy important for distressed companies and individuals
Bankruptcy can be beneficial when a business or individual is in a dire financial situation, due to the legal protections given and an opportunity to satisfy creditors in an organized way. In some cases, this process can be the difference between an entity or individual being able to regain control over their finances versus being totally ruined.
Speak with Fort Walton Beach bankruptcy lawyers
There are attorneys in north Florida who can assist you with filing for bankruptcy if necessary and explaining your rights. To schedule a consultation to find out if this solution will work for you, contact ASG Legal.