Since July 2013, approximately 20,000 businesses have filed for bankruptcy. The Truland Group, a well-known electrical contractor, became one of those companies on July 23. The company filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Virginia and many other companies in the area are feeling its effects. General contractors that had hired Truland to do electrical work in schools, condos and hotels are now forced to find new subcontractors.
Employees are also feeling the effects of the bankruptcy as checks have reportedly bounced. Experts have said that since Truland has filed Chapter 7 bankruptcy, it likely means that the company may not be able to meet its current financial obligations. It will likely have a hard time borrowing or raising money to pay those checks or finish projects that have yet to be completed. On the day before the company filed for bankruptcy, it sent letters of default to 14 companies due to financial difficulties.
Truland was the 10th largest electrical company in the country and had 1,000 employees nationwide. An auctioneer was reported to be at an office tower in Renton to take inventory in the event of a sale. If a company goes through Chapter 7 bankruptcy, some or all of its assets will be liquidated to pay creditors. Any remaining unsecured debt may be discharged.
Chapter 7 bankruptcy enables a company to liquidate its assets in an attempt to pay creditors. Businesses may decide to sell office space, a company truck or anything else that may be considered valuable. A bankruptcy attorney can help guide a client through the filing process.
Source: The Washington Post, “Washington region feels effects of the Truland bankruptcy“, Catherine Ho and Steven Overly, August 08, 2014