On behalf of Law Offices of Mark M. Kratter, LLC on March 08, 2012
A baby stroller company with its headquarters in Norwalk, Connecticut, recently filed for bankruptcy following a product recall of about a million of its strollers. The company, Maclaren, is internationally renowned for its strollers, which are often seen in well-to-do neighborhoods. The company has units in Europe, Hong Kong and North America, but the U.S. unit filed for Chapter 7 bankruptcy late last year.
Although the filing was made on Dec. 29, news of the bankruptcy only became known recently. In its court papers, the U.S. unit of Maclaren, which is also known as American Baby Products, listed assets of just $45,413 against liabilities of $15.9 million. The staggering difference may be at least partially explained by a 2009 product recall in which about a million of its single and double umbrella strollers were found to have a hinge mechanism that could prove hazardous to children.
Many Connecticut businesses are no stranger to unexpected developments that can lead to financial distress. Indeed, even though the national economy is beginning to recover, a number of companies continue to feel the pinch of the recession that hit the nation and prompted many consumers to hold back on spending. When this happens and the company is unable to pay its debts, it may benefit from filing for bankruptcy.
In this case, the U.S. unit of Maclaren has filed a Chapter 7 bankruptcy petition. This means that it plans on winding down the business, which will also allow it to resolve any remaining debts. For other companies in Connecticut that are struggling to meet their financial obligations, Chapter 7 may be beneficial in resolving any debts and allowing the owners to move on.
Source: New York Times, "For Stroller Maker, Bankruptcy Is Latest Setback," Peter Lattman and Andrew Martin, March 2, 2012
