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Michigan coupon company saved by acquisition during Chapter 7

Not long ago, the Michigan-based coupon book manufacturer Entertainment made the deicision to file for Chapter 7 bankruptcy. Through this process, the company would liquidate its assets to pay back creditors before having the remaining debts discharged. Upon filing Chapter 7, the company initially closed its doors, but a recent recent move allowed the company to reopen and remain in business.

The son of the company's founders made the decision to buy the company during the bankruptcy proceedings. By purchasing the company from the investment group that most recently owned it, the man was able to restart operations. In fact, most of the company's former employees are expected to return to work at the Oakland County headquarters.

According to reports, the company was unable to obtain financing to remain open as the result of a dispute between stakeholders in the investment group that owned the publisher. The business was pushed into Chapter 7 as a result. 

When speaking about the acquisition, the son of the former owners was excited about being able to keep his family's company in operation. Additionally, the company intends to honor existing coupons and release next year's coupon book on schedule.

In this case, the bankruptcy process provided legal protection to the struggling business until a buyer came forward. Filing for bankruptcy prevents creditors from trying to collect debt while businesses work on getting finances back in order.

Of course, Chapter 7 may not be the best course of action for every business. In some instances, a company may qualify for Chapter 11 bankruptcy, which would allow them to shed debt and reorganize in order to keep the business operating. Financially distressed business owners in Michigan could benefit from consulting with an attorney to sort through available debt relief options.

Source: Detroit Free Press, "Coupon book publisher bought out of bankruptcy, rehiring employees," JC Reindl, April 25, 2013

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