Quiksilver files for Chapter 11 bankruptcy

We have noted in a few of our posts that the market is ever evolving. Because of this, businesses must evolve with it or face considerable difficulties as the market changes. This fight for survival is likely behind the mergers and acquisitions that we continue to see. When businesses are not able to adapt to new conditions, they may have to seek bankruptcy protection.

The lack of adaptation is likely behind Quiksilver’s recent announcement to file for Chapter 11 bankruptcy protection. The clothing retailer best known for providing gear and clothing at surfing hot spots in the United States and Australia has indicated that the bankruptcy filing applied only to its U.S. division. Meanwhile, Quiksilver reports that its Asia Pacific and European divisions were going strong and that there would be no need to include them in the bankruptcy. 

In its filings, the company indicated that it had $100 million in assets, as opposed to $500 million in liabilities. Is has also asked the court to approve $175 million in financing through Oaktree Management as part of a “debtor-in-possession” plan. This would allow the principal creditor to operate the business during the course of the bankruptcy proceeding.

Being a debtor in possession comes with a host of risks and responsibilities. It is crucial for a creditor that sanctions this activity to have the information it needs to make prudent decisions during the course of bankruptcy. The attorneys of Shulman, Hodges & Bastian have the experience and knowledge to help creditors that seek to have their rights protected through a Chapter 11 bankruptcy.

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