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IronFilm

VER has filed for Chapter 11 Bankruptcy, will merge with PGR

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Filing for Chapter 11 doesn’t mean a company is going out of business.   It’s a way to obtain protection from creditors while an entity reorganizes under the overview of a court.  In this case it appears that their reorganization is taking the form of a merger — sometimes it’s just a way to obtain more capital in order to continue operating — other times it may mean the company is being absorbed. 

 

Going out of business and liquidating any assets is under a different chapter (7, I think, but don’t quote me).

 

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Yes, but still it indicates that the company is financially struggling. 
(hopefully that means they'll raise their prices?)

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11 hours ago, IronFilm said:

Yes, but still it indicates that the company is financially struggling. 
(hopefully that means they'll raise their prices?)

Not really, It is often used as a reorganization tool in order to either raise a companies sell price or as a term of purchase by buyer. Heavy debt is not always an indication of a company “struggling”. Generally, the losses are absorbed by the creditors which is the crappy part of the equation. 

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3 hours ago, John Blankenship said:

Bottom line -- one large company is merging with another large company. 

 

Exactly. When I first saw the headline, I got my hopes too. But reading the rest, I have a feeling this means it could get even worse than before.

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