The Chapter 11 bankruptcy filing came on Monday. Chapter 11 bankruptcy allows for a reorganization of the company, rather than its liquidation in a Chapter 7 filing,The company blamed tighter credit and higher interest rates as contributing factors in the filing. But the company added that it has seen rapid growth since the start of the pandemic, entering several new product categories and expanding its global footprint.
The bankruptcy filing under Chapter 11 allows a company to stay in business as it sheds debt and other costs it cannot afford. Several companies have filed for bankruptcy in a similar manner in the past, including General Motors and most of the nation's major airlines, and gone on to subsequently report record profits.
The filing grants Instant Brands the "time and flexibility to continue ongoing discussions with all of its financial stakeholders," according to a statement announcing the filing.
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