Electric car business files for Chapter 11 bankruptcy

| Mar 7, 2018 | Chapter 11

An electric car business in another state has been financially struggling. It has therefore decided to file for Chapter 11 bankruptcy protection. Any firm in Massachusetts that is having trouble with staying on top of its liabilities may likewise benefit from this form of bankruptcy protection.

In the recent out-of-state case, the company — called GreenTech Automotive — claimed that a new website was partly to blame for its monetary struggles. In its bankruptcy petition, the company cited more than 70 articles on the website that reportedly affected the public’s, investors’ and the government’s perceptions of the green company in a negative manner. In fact, it was this reporting that sparked investigations by the nation’s homeland security department as well as its commission on securities and exchanges.

The green company sued the website back in 2013 for $85 million. However, a judge ended up dismissing the lawsuit the following year. In addition, the company faces multiple lawsuits alleging the company to be a scam. It has both assets and liabilities in the range of $100 million to $500 million.

Sometimes, situations beyond a company’s control in Massachusetts cause the company to lose customers and ultimately its revenue. As a result, the company can no longer keep up with its liabilities. However, filing for Chapter 11 bankruptcy may provide the business with the financial second chance it so desperately needs. The benefit of this type of bankruptcy filing is that a business that pursues it oftentimes can still remain in operation while it is sorting out its debt issues. This means that employees can stay employed and that the company can remain hopeful about achieving business success long term.

Source: richmond.com, “GreenTech, the electric car company once led by McAuliffe, files for bankruptcy“, Ned Oliver, Feb. 27, 2018