Helping With Your Financial Future

Breaking bankruptcy news to the people involved in your business

On Behalf of | May 24, 2024 | Chapter 11 Bankruptcy

How will you tell your stakeholders, suppliers, customers and all the parties involved in your business that you are filing for bankruptcy? Won’t doing so ruin your relationships?

You can let the parties you work with know your business is declaring bankruptcy without shame, as bankruptcy is simply a legal resource available to those businesses that have fallen on hard times. With that said, there are some things you’ll want to keep in mind as you break this news.

Tell them sooner

Once you are certain you want to file for bankruptcy, inform all interested parties. However, it may not be wise to send them all the exact same message. Put your contacts in different categories based on their impact, involvement and interest in the matter. For example, the message you send customers with ongoing contracts or subscriptions should be different from that you send prospective ones. Additionally, the message you send a stakeholder who is an investor should differ from the one you send a stakeholder who is a creditor. Tailor your messages accordingly to address each contact’s concerns and interests.

Send informative, brief messages

Your messages should be brief yet informative. Each message should inform the recipient of the reasons for filing for bankruptcy, how the decisions will affect the business and how their concerns will be addressed.

Encourage feedback

Further, the messages you send should encourage the recipients to give feedback. Provide different channels that they can use to relay their concerns and complaints. And have a team to respond on time and empathetically – recipients of this news should know that you are taking their feedback seriously. Failing to do this can harm your reputation, which can put you at a disadvantage in your future endeavors.

Deciding that your business needs to declare bankruptcy may be one of the most challenging decisions you ever make. Learn as much as possible to better ensure that you can make truly informed choices along the way.