The future of a Baltimore-based business is up in the air, according to local reports. Commerce Corp. apparently finds itself in a financial bind that its creditors want resolved quickly.
Founded 90 years ago, the company is a privately-held lawn and garden supplies distributor. State officials first learned of its troubles at the end of 2012, when the company notified the Maryland Department of Labor, Licensing and Regulation that it would close its main office. Commerce amended the notice in short order, saying instead that it would be laying off 60 to 70 people, or about 25 percent of its nationwide workforce, beginning on Dec. 28.
In mid-February, five creditors petitioned the court to force Commerce to liquidate in a Chapter 7 bankruptcy. They say they are owed $1.73 million.
While Commerce’s CEO was not available for comment, he had told the press when the layoffs were announced that the company was looking for a buyer. From the website, it looks as if it found one.
However, the company that has replaced Commerce on its website announced only that it has acquired one of the distributor’s facilities. There does not seem to be any word on the other facilities or the fate of the corporate office.
When companies like Commerce find themselves in financial trouble, they have several options available to them. What many businesses may not realize is that they must act fast. If they fail to address their debts, their creditors can go above and beyond collections actions. Creditors can, as they have in this case, petition to have the company liquidated and its assets sold. A business that fails to respond quickly to a financial crisis can end up having any decisions about its future made by creditors or the courts.
Source: The Baltimore Sun, “Creditors file involuntary bankruptcy against Commerce Corp.,” Eileen Ambrose, Feb. 20, 2013
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