In dealing with a significant amount of debt, an Illinois resident or business
might decide to sell off material goods to satisfy some of their obligations.
Such is the case for Aereo Inc., a video streaming company that has filed
for Chapter 11 bankruptcy after adverse rulings in a U.S. Supreme Court
decision. Five months prior to the November bankruptcy filing, the company
was deemed to be in violation of copyrights held by other broadcasters.
The violations related to the capture of both recorded and live programming
on miniature antennas. Programs were transmitted to customers for rates
of up to $12 per month. The company's business model was based on
providing consumers with affordable alternatives to cable programming,
and the model has been significantly hindered by the Supreme Court ruling.
Prior to obtaining permission to sell the assets in question, Aereo had
to obtain approval over the sale details with various broadcasters, including
NBC, CBS, Disney, and Fox. The agreement provides for these entities to
attend the equipment auction. Additionally, Aereo must provide status
updates related to the sales on a weekly basis. The company received permission
from the U.S. Bankruptcy Court to proceed with its auction plans.
Chapter 11 allows a company the opportunity to reorganize while receiving protection
from creditors. A company facing significant difficulties due to an issue
affecting its ability to conduct business might need such protection as
its management determines how to continue operating. If adverse circumstances
seem insurmountable, a company might choose a Chapter 7 bankruptcy for
liquidation purposes instead. A business owner who is unsure of which
bankruptcy option is most suitable might work with a lawyer to evaluate
the possibility of salvaging the company. As issues such as selling off
assets are considered within a Chapter 11 bankruptcy, legal representation
might be necessary for convincing creditors of the benefit in doing so.
Source: Reuters, "
Court allows Aereo to auction TV streaming technology assets", December 26, 2014