Those left with large debt compared to their estimated future earnings may be at risk for a Chapter 22 scenario.
Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
At Global Geophysical Services LLC headquarters in a Houston suburb, a few employees are winding down what is left of an oil and gas industry data provider that only three years ago had a staff of more than 1,000 and offices around the world. Global Geophysical is a "Chapter 22" company – a term coined by restructuring experts for firms that return to bankruptcy court after their first Chapter 11 overhaul failed to fix their problems.Last year, it became one of nearly 20 companies that have already exited bankruptcy, but is now one of the first to have filed for creditor protection again.Restructuring specialists say companies which, like Global Geophysical, failed to wipe their balance sheets clean in a bankruptcy, are at a risk of a relapse.In Global Geophysical's first bankruptcy, a fight among creditors was in part to blame for leaving it with more than $100 million in debt it could not shed, according to people familiar with the matter.More than 200 energy companies have filed for creditor protection since the beginning of 2015, according to Haynes and Boone LLP. Of those with initial debt loads of at least $450 million, nearly 20 have exited bankruptcy.
FOLLOW THIS ARTICLE