Readers in New Jersey may be interested to learn about the troubles of a natural gas company that supplies consumers across the nation. The company recently filed for a Chapter 11 bankruptcy in their home state. This came after the business was unable to find funding sufficient to continue its current operations.
According to a report about the Chapter 11 bankruptcy, the company found itself in trouble after the sale price of natural gas remained low for an extended period of time. To address the reduced price, the company, GMX Resources, Inc, took steps to make its supply chain and production more efficient. Unfortunately, these efforts were not enough to make up the needed difference in the costs of manufacturing versus the sales price of natural gas.
Now, the New York Stock Exchange is expected to take steps to remove the business from its listing. In fact, after the Chapter 11 filing, the company’s stock value fell from a one-year high of $21.84 to $2.19. However, the good news for the business is that senior note holders for the company have committed some $50 million in debt financing to help restructure GMX Resources.
Filing for a Chapter 11 bankruptcy is a difficult decision for business owners in New Jersey. However, when the sales price of the product of the business falls for an extended period of time, bankruptcy reorganization may be a financially responsible and wise choice. In many cases, the bankruptcy can allow time for a business to restructure so that it can return to profitability or achieve a satisfactory sales price. This time can be important to a struggling business and may offer some needed support as the business seeks to recover from economic troubles.
Source: San Jose Mercury News, “GMX files for Chapter 11 bankruptcy protection,” April 1, 2013