Following widespread speculation yesterday that Juul Labs was on the verge of filing for chapter 11 bankruptcy, both Bloomberg News and the Wall Street Journal reported that such a decision has not yet been made. It could, however, happen soon.
The speculation followed a tweet by Reorg reporter Harvard Zhang, claiming that Juul was “preparing to file chapter 11 bankruptcy.”
The bankruptcy news isn’t really new
But the Wall Street Journal and Bloomberg had already reported—as early as June 24—that Juul has been working with advisers to address its financial challenges, and has considered chapter 11 bankruptcy as one of several options. In other words, Juul has been “preparing” for a potential bankruptcy filing for at least three months.
Chapter 11 allows a company to continue operating while it works with a court and its creditors to reorganize its finances. It doesn’t necessarily signal the death of the company.
The Journal reported Tuesday evening that Juul has received inquiries from lenders and “will soon formally request debtor-in-possession financing options,” which (if pursued) would allow the company to maintain operations during the bankruptcy process. Bloomberg News reported essentially the same thing.
Jim McDonald – Vaping360.com – 2022-10-05.
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