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About a month ago, we discussed the Chapter 11 filing of the special effects company Rhythm & Hues. The company is one of the most renowned special effects companies in the world (they worked on the movie “Life of Pi,” which won the Academy Award for Best Visual Effects), but has faced a declining financial landscape for awhile now. Foreign competition in the visual effects industry has left many visual effects firms thinking about bankruptcy.

One of the most famous visual effects companies in the entertainment industry has fallen on hard times. After laying off 200 employees, Rhythm & Hues — which did work for the film “Life of Pi,” which is up for an Oscar for best visual effects — has taken another step towards securing its financial livelihood by filing for bankruptcy protection. Rhythm & Hues is not the only visual effects company to struggle. In fact, numerous such companies have either disappeared or sought bankruptcy protection.

Continuing the Chapter 11 theme from our last post, the American Bankruptcy Institute recently released a report that says Chapter 11 bankruptcies filed by businesses plummeted over the last year. In Jan. 2012, there were 749 such Chapter 11 bankruptcies — whereas this January, there were only 479. That represents a remarkable 36 percent drop.

Individuals in Los Angeles are not the only victims of outstanding debt. Many businesses in the area, and all around the country, struggle to stay afloat after taking out loans — and the smaller that business is, the more difficult it can be to get out of the red. Even with the seemingly impossible task of paying the debt back looming over a business, the owners of the company should not panic. There are ways to manage your debt in a way that allows the company to survive, move on and even thrive.

With New Year’s upon us, there are many businesses — small and big, thriving and struggling — that will be asking many questions about their fiscal situation. The financial health of any organization is paramount to almost any other issue.

Chapter 11 bankruptcy could actually be considered a “healthy” option for some businesses. Chapter 11 can allow insolvent companies to pay back their debt under different conditions than what their creditors originally imposed. This revised deal can reduce the amount paid for regular installments and extend the length of time an organization has to pay back the debt. By freeing up the finances, a company in Chapter 11 can look to improve their outlook in 2013.

Last week, we discussed some of the key Chapter 11 bankruptcy terms. We continue our discussion this week, defining some of the main actions you may see in a Chapter 11 bankruptcy.

Automatic stay: Bankruptcy triggers an automatic stay. The “automatic stay” stops all judgments and collection activities (including foreclosures) for a period of time. This means that creditors cannot take action to collect on a debt, giving the debtor time to negotiate a Chapter 11 bankruptcy plan to pay back his or her debts. The automatic stay does not apply to certain actions, such as actions to withhold in repayment a pension, stock bonus, etc.

Determining how a Chapter 11 bankruptcy works before your company files for Chapter 11 can be confusing, in part because the bankruptcy code is complicated. This blog post and next week’s post will discuss some of the key terms you might see while researching Chapter 11 bankruptcy.

Across the country, people are flocking to grocery stores to buy up the last bits of Twinkies and other Hostess goodies. Hostess declared on Friday that it will be unable to continue its Chapter 11 bankruptcy and has asked the bankruptcy court for permission to liquidate and go out of business.

If your business is facing significant debt, it may seem like it will never surface as a productive entity. This is especially true if you expanded too quickly and now find yourself facing lease issues in addition to normal business debt.

American Suzuki Motor Corp recently received bankruptcy court approval to borrow money from its parent corporation, Suzuki Motor Corp.

Approval of the $45 million loan at a 3 percent interest rate was necessary for the bankrupt corporation, which plans to shut down some dealerships while it works to increase boat and motorcycle sales.


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