Is Carvana Filing for Bankruptcy?
Carvana has disrupted the auto industry in an alarming way given the business model it follows. Carvana, which has often referred to itself as a car vending machine, buys and sells vehicles, and will even go as far as delivering them to your home, for a fee of course.
Although the company seemed to have been gaining traction over the years given how simplified it has made the car buying process, it appears Carvana may be in trouble. Is Carvana filing for bankruptcy?
Carvana may be “at risk” of bankruptcy.
On December 7, 2022, Yahoo reported that Carvana’s stock had dropped significantly after “the online car retailer’s biggest creditors reportedly signed an agreement to cooperate in potential restructuring negotiations as the company faces growing bankruptcy risk.” (1) Yahoo says Carvana’s stock dropped as much as 43% after the news got out.
Yahoo also cited that 10 of Carvana’s biggest lenders who hold about “$4 billion of its unsecured debt “have made a three-month pact to act together in the case of restructuring.” Some of those creditors include PIMCO and Apollo Global Management, Yahoo cited.
Will Carvana go out of business?
If Carvana does decide to file for bankruptcy, it could file Chapter 11 which would allow it to restructure and reorganize its financial affairs. In the case of Chapter 11 bankruptcy, Carvana would still be able to operate as usual, though it could make some cutbacks, and even borrow new money.
When should a business file for Chapter 11 bankruptcy?
If a business isn’t looking to liquidate its assets in order to repay its creditors, but instead, would like to continue with operations and gain a handle on the debt it has accrued, Chapter 11 bankruptcy might be a suitable option. Although bankruptcy isn’t for everyone, it can help individuals and businesses settle their debt and move forward without it tagging along.
If your business is struggling and it’s accrued a substantial amount of debt, speak with a St. Clair County, Alabama bankruptcy lawyer to find out more about how Chapter 11 bankruptcy works. If it sounds like a good option for you, the St. Clair County, AL bankruptcy attorneys at Hill, Gossett, Kemp & Hufford, P.C. will assist you through the process and ensure you understand each phase of it.
Contact Hill, Gossett, Kemp & Hufford, P.C. to learn more about bankruptcy and how it may help your business.
Have questions about this article or a legal concern? Call 800-672-3103.
Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.
Hill, Gossett, Kemp & Hufford, P.C. can be reached at:
Moody Office
2603 Moody Parkway, Suite 200
Moody, Alabama 35004
Phone: (205) 640-2000
Website: www.hwhlawgroup.com
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7900 Parkway Drive
Leeds, AL 35094
Phone: (205) 699-5500
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6441 U.S. Highway 11
Springville, Alabama 35146
Phone: (205) 467-2225
Photo Credit: Michael Rivera, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons
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