A grocery brand is now led into an unexpected bankruptcy due to a whopping $7,000,000 loss after mishandling its product.
Freirich officially filed for Chapter 11 bankruptcy on Wednesday, March 20.
In an email to its business partners, CEO Paul Bardinas explained what happened and outlined what’s next for the company.
“Our Chapter 11 filing was a result of a large one-time financial loss ($7,000,000) due to the mishandling of 1.2 million pounds [of] our product by a third-party cold-storage facility,” Bardinas wrote.
“This significant loss, which we are seeking to recover, left us with little choice but to seek the court’s protection to safeguard our business, employees, and business partners as we proceed with that effort.”
On the bankruptcy form companies must fill out when they file for Chapter 11 protection, Freirich checked off a debt range of $10 million to $50 million, reports TheStreet.
The CEO wanted to make clear that its actual debt was in the low end of that range.
“Our debt has never exceeded $10.5 million, and, in fact, for most of every year we would operate debt-free.
We only tapped our credit line in the first quarter to fund our St. Patrick’s Day production,” he explained.
The timing of the company’s product loss was a major part of why it had to file for bankruptcy.
“Unfortunately, this loss did occur at the worst possible time, when we did borrow a significant amount of money to finance our St. Patrick’s Day retail corned beef operations and inventory, and it affected a significant portion of that corned beef,” Bardinas added.
“Bankruptcy protection will enable our company to safeguard our business, employees, customers, and partners while we seek to recover our financial loss and propose a plan to restructure our debt, renegotiate contracts, and streamline the company in order to emerge from this process with a much stronger balance sheet,” the CEO wrote.
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Also Read: A Massive US Company Is Now Closing 500 Locations
Other Economy News Today
A massive bank is now cutting hundreds of jobs in its investment division, people familiar with the matter are confirming.
Barclays is gearing up to lay off several hundred employees within its investment banking division, part of a long-term strategy to cut costs and boost profitability within the unit, sources familiar with the matter told Bloomberg on Wednesday.
The anticipated cuts are part of the company’s annual performance-based workforce reduction process and will take place in the coming months, according to the sources.
“We regularly review our talent pool to ensure that we can invest in high-performing talent, execute on our strategy, and deliver for our clients,” Barclays said in an emailed statement to Bloomberg.
“However, there are no finalized numbers for this year’s review.”
The bank in January revealed that it cut 5,000 jobs last year from its workforce of 84,000 to “simplify and reshape the business” and to save £1 billion in costs — about 7% of the lender’s annual operating expenses.
Barclays went further last month, laying out a three-year plan to improve performance while cutting £2 billion in costs.
The reorganization will split the bank into five operating divisions: its U.K. retail business, U.K. corporate bank, investment bank, U.S. consumer bank, and its private bank and wealth management.
Simultaneously, Barclays pledged to return £10 billion to its shareholders over the next two years through buybacks and dividends.
The performance-based job cuts come roughly a week after Barclays CEO C.S. Venkatakrishnan said his investment bankers are a step behind their counterparts in the bank’s trading division in their efforts to bolster returns for the company.
“The parts where we need greater [return on equity] efficiency is investment banking fees.
There, we are much more debt capital markets heavy than the U.S. banks are, and that’s where we’ve got to be more efficient,” Venkatakrishnan said at an investor conference, according to Bloomberg.
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Also Read: A US Bank is Now Denying Customers Access to Money
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