Submitted by Jen Jones on Tue, 11/29/2011 - 10:12am
Threats of a double-dip recession — a recession, followed by a short-lived recovery, followed by another recession — permeated the headlines in 2011, at a time when there were plenty of signs that this second coming of an economic downturn had begun. Stagnate hiring, a paltry job market and plummeting real estate prices, as well as low consumer confidence, all made another financial reckoning feel less like a fiction and more like a reality.
But did this double-dip economic climate put the freeze on one of the country’s most popular purveyors of subzero sweets?
Such seems to be the case with the recent bankruptcy of Dippin’ Dots. This month, the pioneer of pint-sized ice cream beads, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Paducah, Ky. in an effort to avoid foreclosure.
According to The Wall Street Journal, “The manufacturer of the quirky and colorful ice cream beads, which are flash frozen using liquid nitrogen, owes $12 million, the bulk of it to a unit of Regions Financial Corp., which moved to foreclose on the loan this week. The 170-worker company, which calls its frozen treat "ice cream of the future," fell into technical default four years ago at the peak of the economic crisis, when customers were no longer willing to spend the few dollars it cost for a cup.”
With 140 Dippin' Dots franchise-controlled retail locations dotting the U.S. controlled by franchisees, along with nearly 10,00 small vendors who sell the ice cream at fairs, festivals and sports games, the company’s financial setbacks could have meant a serious dent in selections for summertime sweets.
After all, the company did just end a four-year battle with its biggest lender.
Dippin' Dots offered its bank several proposals to pay a portion of a loan, borrowed after recessionary sales woes, but the bank rejected the offers before posting a foreclosure notice last week. Now, Dippin’ Dots faces the same fate as so many underwater homeowners: unable to pay its loans back to a financial institution unwilling to negotiate.
The Dippin’ Dots bankruptcy is illustrative of how a Chapter 11 filing can help many companies adapt to a changing business landscape following our recent Great Recession. In the wake of the housing crisis, lingering consumer skittishness, drops in tourism and trade, and other economic woes, many industries have faced financial challenges, including those with great promise like Dippin’ Dots’ patented freezing process, taking the businesses that serve them right along with it.
If your particular industry has been affected by the economic downturn, as in the case of Dippin Dots, Chapter 11 can buy you the right amount of time to reorganize the way you do business and get back to making better financial decisions. And buying you time to tweak your business model is part of what Chapter 11 is all about: diminishing debt while you save your means for a more profitable future.
Are you personally an active businessman or woman who is considering a new way to rev up your business through the benefits of a Chapter 11 bankruptcy filing? Or are you an average American reading about the benefits of bankruptcy and want to learn how these types of benefits can help you? If you are seeking the broad protections of bankruptcy, it’s best to consult with a qualified attorney before filing. A good bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests throughout the duration of the case, regardless of your status. The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.
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