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Creator of revolutionary basketball files for Chapter 11 in MA

When starting, running or updating a business in Massachusetts, there will be unavoidable ups and downs. In some cases, it is necessary to consider filing for bankruptcy.

No matter what kind of business it is, filing for bankruptcy has happened to even the most successful people and companies. Chapter 11 is a tool that can help a business reorganization, assist in getting through tough times and get out the other side in better shape to move forward and be successful. Having a full understanding of Chapter 11 and how it can be beneficial is key before making the decision as to whether it is the right choice.

A start-up, based in Massachusetts, made a "smart" basketball has filed for bankruptcy, due to a paucity of funds. This basketball is revolutionary in that it has sensors that will send various forms of data to smartphones. The products have chips that record activities with the basketball and provide data to the users. Users can share that information with people around the world and stage competitions. The invention was lauded when it was created, and it was even mentioned as a top new invention by Time Magazine in 2014.

In the filing, the chief executive states that the company seeks a loan that will assist it to stock up on its inventory. The judge in the case has granted the company the ability to spend a restricted amount in the interim. The CEO says that the company has faced its financial issues because of a group of investors who made promises they did not keep.

Since the company filed for bankruptcy this month, it will have time to restructure its debts and not have to worry about default or foreclosure. The company has plans to monetize its products once they are beyond their current financial issues.

As this example shows, even the most innovative businesses might find themselves having problems that make Chapter 11 necessary. When this is a growing possibility, understanding the benefits and negatives of a business bankruptcy can help with making the decision to move forward with filing for bankruptcy.

Chapter 11 can help with restructuring debt, repaying creditors and having the owner maintain control under court supervision. Speaking to an attorney experienced with Chapter 11 bankruptcy can provide help and guidance.

Source: The Wall Street Journal, "Maker of 'Smart' Basketball Files for Bankruptcy Protection," Katy Stech, March 11, 2016

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