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Tennessee technology subcontractor files for bankruptcy

Owning and operating a business isn't always a clear and precise route. Sometimes things come up that challenge even the savviest of managers and business owners. A Tennessee technology subcontractor for Google found tough times recently, forcing them to file for asset reorganization bankruptcy. Essentially, the company has overwhelmingly more liabilities than assets and had to do something to reconcile that discrepancy.

The company is a tech subcontractor for giant Google and was much anticipating the rollout of their new technology. So much so, that they took on a bunch of liabilities in anticipation of and in order to be ready for the new tech release. However, the rollout of the technology slowed to the point where the new tech could not be capitalized. Meanwhile, the company had already incurred debts.

There were efforts to minimize the debt to income ratio by making several attempts in 2017 to find a solution outside of bankruptcy - "it pared down its staff and payroll, terminated contracts that were operating at a loss and its ownership sold non-Phoenix properties in an attempt to pay down the debt," said the company's representative. However, their attempts ultimately weren't enough, and bankruptcy became their best option. What is likely most frustrating for the company is the fact that another company's decisions had a huge impact on the company's business decisions.

While reorganizing, likely under Chapter 13 or similar, the company has plans for the future. Clearly they want to get back to their past successes, but they know it will take some time to get there. Incurring too much debt too quickly can have an adverse affect on the health of the business. Businesses can weigh the pros and cons of taking on additional debt with growth plans in place. However, when debt becomes too overwhelming, it is important that businesses understand their debt relief options.

Source: nashvillepost.com, "Google fiber subcontractor files for bankruptcy," Stephen Elliott, September 14, 2017

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