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Carpet maker files for Chapter 11 bankruptcy protection

A carpet maker in another state recently chose to file for bankruptcy in federal bankruptcy court. The company, Beaulieu Group LLC, said it plans to reorganize the business's finances under a Chapter 11 bankruptcy plan for restricting debt. Companies in Massachusetts and other states that are struggling to make ends meet may benefit from such a bankruptcy filing.

In the case of Beaulieu Group, the company reported that it owes its lenders anywhere from $50 million to $100 million. However, the lenders agreed to keep supporting the business by providing what is called debtor-in-possession, or DIP, financing. This debt will be mixed with cash from business operations to make sure that Beaulieu Group continues its operations while restructuring its finances and debt.

The company said it had explored all options for addressing the company's capital structure and felt that the Chapter 11 bankruptcy process would be the best one considering its particular circumstances. The company, which is 40 years old, was at one time the third-largest maker of carpets in the United States. However, the company's position in the industry has slipped, as more customers are shifting away from carpeting to hard surfaces for their flooring.

Companies that are suffering financial losses and end up having more liabilities than assets may benefit from Chapter 11 bankruptcy protection. Through this type of bankruptcy filing, such a company may be able to regain a firm financial footing and emerge as a stronger business in the years ahead. An attorney can help with the complex process of filing for bankruptcy in Massachusetts.

Source:, "One of America's biggest carpet makers files for bankruptcy", Dave Flessner, July 17, 2017

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