Bankrupt Companies Often Offer End Of Business Sales
Sometimes there are big savings to be had by buying merchandise from bankrupt companies as they attempt to liquidate assets to appease their creditors. Typically, when a company files for bankruptcy it is order by the court to liquidate all assets under the watchful eye of a court appointed trustee to insure they are receiving an appropriate price for the items being sold. In many cases, bankrupt companies will be sold at auction to insure the income derived from the sale of the assets is the most it can be.
Investments in bankrupt companies are often considered a bad risk at best, as if the company has filed for a Chapter 11 re-organizing bankruptcy and fail to exit bankruptcy to resume normal operations, the liquidated assets are divided up among the priority creditors. If there is any money left over it will go to the stockholders, based on the number of shares they own.
Additionally, bankrupt companies unless they had files articles of incorporation may also require the owners of record to liquidate their person assets in order to satisfy the bankruptcy court's order to repay part of their secured debt. Whether the business is listed as a sole-proprietor or a partnership, bankrupt companies can be forced to claim property of the company's owners to help pay off the holders of any and all secured debt.
All Sales Final At Bankruptcy Sales
For bankrupt companies that are forced to liquidate their assets at a court-ordered auction any merchandise bought by the public will be purchased with the understand that it is available without any warranty, The exception may be merchandise that is still in its original factory box and is covered by a factory warranty. Typically, bankrupt companies are also forced to sell their business related equipment as well and a person just starting a business can often find good deals on used operational office supplies and equipment.
There is certainly no shame in buying from bankrupt companies and the reasons a company may end up in this position caries. There are many reasons business fail including poor management and lack of credit, and outside influences such as developing a bad reputation can spoil their chances of success.
Every year new business open and other close and many times bankrupt companies will see their management attempt to buy the company as is through the bankruptcy court and if they have the financial backing to do so, the court may well approve the sale along with the transfer of debt.
