Society is constantly evolving and technology and scientific research appear to be on the leading edge of this evolution. Just because these may be the leading fields does not mean they are necessarily the most financially secure. Just like other business owners, those who own technological and scientific companies can face financial difficulties.
One laboratory company, with an office in Illinois, is showing just how real the financial blows are to some science-related businesses. The company is Laboratory Partners, Incorporated, but it does business under its more common name of Medlab. It has several laboratories and offices throughout the United States. It has nearly $10 million in assets. However, these assets do not outweigh Medlab's debts. The company has nearly $50 million in debt.
Medlab's financial woes have been mounting all year. First, it defaulted on its debts. Then, a forbearance agreement expired. The company plans to continue to service its customers, but it has to make some adjustments to do so. It has decided to file for Chapter 11 bankruptcy. Medlab has specifically petitioned the court to sell two of its divisions.
Bankruptcy is specifically aimed at helping Illinois companies and individuals get a handle on their finances. It is a formal legal tool that those with debt can use to repay as well as discharge debts. There are two major theories that drive bankruptcy: liquidation and reorganization. Chapter 11 bankruptcy falls under the umbrella of the latter category. It is a device that companies can use to restructure themselves with court help in order to prioritize and pay off debts, with the goal of remaining in business.
Sometimes court intervention is just what a company needs. Although it may not initially seem like the most appropriate option, it can be the best solution. Medlab's bankruptcy case shows just how helpful bankruptcy can be.
It is a major decision to go through bankruptcy and it is not an easy decision-making process. In order to understand if a company or individual qualifies, they should consult with a professional. Furthermore, they can better understand their options and rights, which will help them navigate through the process and better plan for the future.
Source: Cincinnati.com, "Medlab files for bankruptcy protection," Bowdeya Tweh, Oct. 30, 2013