Redcon1 Dodges Chapter 7 Bankruptcy Fight – Insolvency / Bankruptcy
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Seth Kleinman spoke to Initiated in natural products about an involuntary Chapter 7 bankruptcy petition filed against sports nutrition brand Redcon1 by three of its creditors.
An involuntary bankruptcy petition is typically filed “when multiple unsecured creditors of a corporation believe that the management of the corporation itself is doing something with the corporation’s funds that is improper and that the corporation is already or will become insolvent. due to one of these improper dealings,” Seth explained.
Although Redcon1 and its creditors reached an agreement and filed a motion to dismiss the bankruptcy petition, the stakes could have been high for the company, especially if the case continued in Chapter 7 and the judge had appointed a trustee in bankruptcy.
According to Seth, a trustee in bankruptcy assumes the management of a business, including its books and records, and his job is to wind down the operations of the business.
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Originally posted by Natural Products Insider
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