Many people in New Jersey are aware that as the economy has declined in recent years, the bankruptcy-filing rate has increased. Businesses have by no means been immune to the economic troubles of the Great Recession and business bankruptcy filings are more common now than they were in the past.
For example, a very large financial institution called Arcapita Bank BSC recently filed for Chapter 11 protection from its creditors.
Arcapita Bank BSC is a manager of Islamic-compliant investments in the U.S. and around the world. It reports that it has $7 billion investments under management and owns the Irish power utility Viridian Group Ltd. The filings report that the bank has assets of $3.06 billion and debts of $2.55 billion.
The business bankruptcy came after Arcapita Bank BSC was unable to negotiate an agreement with creditors on a $1.1 billion loan that is due at the end of this month. The move, analysts suggest, will help to protect the company from some of its creditors. The filing of the Chapter 11 proceeding may also protect assets of the company that are located in Europe, Asia and the United States.
When businesses begin to fail, they often seek to protect their property and assets from creditors. Filing a business bankruptcy can assist in this effort and can bring to a halt many legal actions against a business. Additionally, as is the case with Arcapita Bank BSC, New Jersey businesses are often able to continue in operation as they work to restructure their debts and finances to better pay creditors.
Source: San Francisco Chronicle, “Arcapita Files for Bankruptcy Protection as Debt Talks Fail,” Tiffany Kary and Arif Sharif, March 20, 2012
