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Chapter 7 bankruptcy filed by audio company

Audioplex, best known for its high-end home audio supplies, has closed its doors for good, according to local business news. South Carolina residents with an interest in home theater technology may be familiar with the company, which made its name producing and distributing select volume controls, IR distribution products and other peripherals. The company filed for Chapter 7 bankruptcy on June 11 of this year.

According to the paperwork, the company's debts have climbed to roughly $625,000 against assets totaling $802,000. This bodes well as it means the company should not have to liquidate 100 percent of its physical assets to satisfy the outstanding debt. In fact, the current plan moving forward is to liquidate only $260,000 worth of inventory.

The majority of the company's debt is tied up in two separate mortgages owned by Bayview Loan Servicing. Another large chunk is taken up by two separate credit card companies, as well as a law firm. The sale of the company inventory is set to begin soon, as the case is currently being overseen by a federal Bankruptcy Court in New Hampshire.

While some South Carolina residents may feel that Chapter 7 bankruptcy is a "last resort" for a failing business, the truth is that it is simply another tool in the arsenal of any business struggling with financial challenges. Chapter 7 allows for the liquidation of company assets as a means of satisfying outstanding financial obligations, all under the supervision and protection of the court. This typically allows the business principals to move out from under the weight of existing debt in order to reenter the marketplace on their own terms.

Source: cepro.com, "Audioplex Declares Chapter 7 Bankruptcy", Julie Jacobson, June 16, 2014

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