Advice to In-House Counsel: Don’t Shy Away from Bankruptcy as a Strategy

With the economic challenges brought on by the COVID-19 pandemic, many companies are faced with decisions that seemed inconceivable just 90 days ago. For companies experiencing true financial crisis, however, filing for bankruptcy – too often viewed as the last resort – should be considered as a potential strategic path to a fresh start and immediate relief that may enable a company to weather the current economic storm.

When business owners hear the word “bankruptcy,” they often sink into fear and despair. They may imagine the doors of their businesses barred shut and trucks hauling away their company’s property. While no one relishes the idea of bankruptcy, it often is a solution rather than a problem. While bankruptcy will result in a period of change, it doesn’t have to be feared. Instead, bankruptcy often may be more appropriately seen as a strategy to obtain a fresh start.