California is home to Hollywood, and as such our state probably has more companies involved in the production of movies and television shows than any other. However, even those companies that have experienced relative success in the past may not always be able to keep the profits churning, and that appears to be the case for one company that has locations in both Santa Monica and Hollywood.
According to the reports, Soundelux, a company that provided sound production on thousands of the most popular movies and television shows of recent years, including hits such as "The Hunger Games" and "Game of Thrones," has filed for Chapter 11 bankruptcy protection. The bankruptcy filing comes amid reports that the company closed down two out of its three total locations, with only the company's headquarters in Burbank to remain open.
The reports seem to indicate that the company expects a rather tough transition throughout the Chapter 11 process. The company immediately laid off nearly 100 employees, to their surprise, and the initial statements from company spokespeople claim that the company is preparing to be sold.
The decision from company leaders that filing for Chapter 11 bankruptcy is the best financial option is never an easy one. Besides the public relations hit a company will inevitably take in a business bankruptcy, there is always the potential for negative consequences for the company's employees, as was seen in Soundelux's case. But, Chapter 11 can also serve as a new beginning, allowing a company to either reorganize or be sold, and thus securing the company's best financial prospects for the future. This process is probably by far the best option for debt relief for struggling companies.
Source: deadline.com, "UPDATE: Soundelux Files For Chapter 11 Bankruptcy; Pink Slips For 30," David Robb, May 21, 2014