Another US company now declares an unexpected bankruptcy after its liabilities largely consumed its total assets this year.
Parts iD, a technology driven automotive company, has filed for Chapter 11 bankruptcy.
“Management believes that the company is a market leader and proven brand-builder, fueled by its commitment to delivering an engaging shopping experience; comprehensive, accurate, and varied product offerings; and continued digital commerce innovation,” the company said in its most recent earnings filing.
In that report, the company showed about $18.7 million in assets against more than $55 million in liabilities.
In its bankruptcy filing, Parts ID reported similar numbers.Â
The company has continued to operate, and its websites remain online and operational.
As of 10:32 a.m. EST Dec. 27, Parts ID had not posted anything about the filing on its corporate and consumer-facing websites.
Even before the Chapter 11 filing, Rapid Ratings, a service that uses public data to track public companies’ financial health, rated the company a “very high default risk.” That rating was released on Dec. 16, 10 days before the Dec. 26 bankruptcy filing.
“A Core Health Score of 26 suggests low levels of efficiency and a performance which is not sustainable over the long term,” Rapid Ratings reported on its website.Â
“Within the Resilience Indicators, we see significant weakness, and at this Core Health level, these Resilience Indicators are critical in determining default risk.
Companies with this combination of Core Health and Resilience have a seriously troubling short- and medium-term outlook.”
Parts ID has not commented on the Chapter 11 bankruptcy filing, but in its Q3 earnings release it outlined some cost-cutting efforts.
“During 2022, we took several measures to reduce operating costs, including reducing advertising expenses, general and administrative overhead, and capital expenditures,” the company said.Â
Also Read: A US Bank is Now Denying Customers Access to Money
Other Economy News Today
A popular US chain now makes unexpected layoffs in California ahead of the minimum wage increase soon to take place.
In October, California Governor Gavin Newsom passed a new law to increase wages for fast-food workers across the state.
The new AB 1228 legislation, or the Fast Food Franchisor Responsibility Act, will come into effect on April 1, 2024, and guarantees fast-food employees in California a minimum wage of $20 per hour- the highest in the United States.
Pizza Hut franchises in California are expected to lay off approximately 1,200 drivers amidst the minimum wage increase.
The company will be relying on third party delivery companies such as DoorDash.
Southern California Pizza Co, a franchisee covering Orange County and the Inland Empire, has stated it will cut 841 salaried delivery drivers, while PacPizza, which operates Pizza Hut establishments across California, will eliminate jobs in February.
“PacPizza, LLC, operating as Pizza Hut, has made a business decision to eliminate first-party delivery services and, as a result, the elimination of all delivery driver positions.”
The CEO of popular restaurant chain Jack in the Box, Darrin Harris, expressed his views on how this may impact the industry this week.
The business owns Jack in the Box, which has about 43% of its 2,200 locations in California, and Del Taco, which operates about 63% of its 591 locations in the state.
Harris expects to raise prices 6% to 8% companywide, mainly because of the California wage hikes.
BJ’s, a restaurant chain headquartered in California, has also stated that higher menu prices will reflect the wage increase. BJ’s has 59 locations across California.
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Also Read: Massive Layoffs in California Now Underway Prior to Holidays
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