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Fairway Market dangerously close to bankruptcy filing

[fa icon="clock-o"] February 19, 2016 [fa icon="user"] Scura Law Firm [fa icon="folder-open'] Business Bankruptcy

closed_businessExpanding a business requires more than just a business plan. There must be additional capital, cash resources or another source of funds that will help leverage the process. When this is not available, it might mean putting this expansion on hold; however, if such a business venture is unavailable due to financial problems, a business might need to restructure its finances or even consider debt relief options.

The grocery chain Fairway is currently facing financial danger, causing the possibility of business bankruptcy. According to recent reports, the chain that has roughly 15 stores in New Jersey, New York and Connecticut had plans to open more stores in the metropolitan area. However, following a huge loss in the last quarter in 2015, Fairway not only lost its chances to open more stores, but if it is not able to raise enough capital, the company will likely have to file for bankruptcy.

According to their filings with the U.S. Securities & Exchange Commission, Fairway Market was in compliance with financial covenants during the last quarter of the previous year. However, if their financial situation does not improve or if Fairway does not obtain additional equity financing, this could mean non-compliance by the end of the first quarter of 2016.

Fairway asserts that their loss of sales, upsurge in operating costs and reduction in margin is a result of fierce competition in the market. This has ultimately led to the downfall of the company and their current decision regarding bankruptcy.

When a company is no longer able to remain profitable, this might be time to assess what is in the best interests of the company. If keeping the company going is no longer a viable or realistic option, a business bankruptcy might be the best way to resolve this financial problem. Those dealing with debt or financial issues should understand how this could impact the future of their business. This could help a business owner make an informed decision regarding their debt relief options.