Companies that look to restructure following major setbacks or debt problems often turn to bankruptcy filings and proceedings to help with debt relief or to provide the time needed to reinvent the organization. This restructuring can affect things as critical as a company’s main product and business plan, resulting in a different operation than before the bankruptcy.
A company in Hartland, Wisconsin, that was closed down by the U.S. Food and Drug Administration due to a major recall of the alcoholic wipes that it produced is now looking to reopen as a cosmetics manufacturer. The company’s wipes were recalled after 11 people died from using them.
The Triad Group, formerly a manufacturer of medicines and alcohol-based wipes, was advised by the government that it could not continue operations at the location until a series of stringent conditions were met. The change to cosmetics will allow the group to proceed with reopening without the need for FDA intervention.
The company must still present its case in U.S. Bankruptcy Court overseeing its protection, and this filing is expected to take place in late 2012. It announced the move in court recently.
Bankruptcy protections allow a company to discharge or reduce debts so that it may remain in operation or close down and restructure without liquidating all of its assets. Maintaining assets such as a plant or manufacturing equipment can allow a company to recover from unforeseen circumstances and prosper in the long term.
Courts must approve all major decisions made regarding a company operating or reorganizing under bankruptcy protections, and business owners should strive to learn all they can about bankruptcy law.
Source: WHBL, “Shuttered Triad Group plans to re-open as cosmetics maker,” Sept. 14, 2012