Monday, April 1, 2019

Hard Shut Downs - Not So "WOW" for Stakeholders

WOW Air's immediate shutdown on March 28th illustrates the pain inflicted on customers with an "abrupt ending" of business operations rather than "gradual winding down of assets and liabilities.” The company's extreme financial distress underscored the need for creative options to avoid the checkmate scenario when new financing failed to materialize. The WOW Air case involving “forced liquidation” is a stark reminder for business owners in troubled situations that “orderly liquidation” tends to achieve fairer outcomes for all stakeholders including the bank, customers, employees, and trade creditors.

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