Quality Heating and Air-Conditioning Company Bankruptcy
Please prepare a response to the following post:
I chose the case of Quality Heating and Air-Conditioning. The company was founded in Wilmington, DE in February 1966. Quality Heating and Air-Conditioning has grown to over 25,000 square feet of space and 100+ full-time employees but continues to be a small family-owned and operated business (QHA Inc). After being in business for over 50 years, on March 22, 2023, the Board of Directors held a special meeting and decided that due to the company’s financial position, it would be best to file a motion for voluntary Chapter 11 bankruptcy.
From an accounting perspective, it makes sense that Quality Heating and Air-Conditioning chose to utilize Chapter 11 voluntarily. This allows them to perform a reorganization of the company instead of liquidation (Epiq 11). Based on the company’s assets, Quality Heating and Air-Conditioning will be able to satisfy its liabilities to creditors with claims secured by property and creditors with the 20 largest unsecured claims.
Based on the reading from the text, bankruptcy can be either voluntary or involuntary. You may file either Chapter 7, which allows you to liquidate your assets or Chapter 11, which allows you to restructure the company. In the case of Quality Heating and Air-Conditioning, they chose the latter which will allow them to maximize the value of the corporation and returns to the stakeholders once the bankruptcy has been discharged in court.
Response Post
Students Name
Institutional Affiliation
Course
Tutor
Date
Response Post
Bankruptcy has a positive and negative side to a company. On the positive side is that it helps a company stop incurring more debts which have become a burden making it unable to offset. However, the negative side is that in the event of a liquidation, many people will lose, especially employees and creditors, as their source of income will end (Rodano et al.,2016). Quality Heating and Air-Conditioning company boldly filed for bankruptcy under Chapter 11 to ensure the company continues operating. Chapter 11 allows companies to continue operating as they plan a reorganization (Rodano et al.,2016). The company minimizes pressure from creditors on paying their debts, giving them a good chance to strategize and bounce back stronger than before. Quality Heating and Air-Conditioning has been operational for over forty years, making it a company with a strong base; hence, liquidati...