Bankruptcy Prevents Layoffs
By Raymond V. Gessel | Published on August 9, 2011 | 0 Comments
When the economy is in the dumps nationally, who suffers the most? Is it employers or employees? Big business or small business? Politicians or lay citizens? When it comes to businesses in Kent, Washington, going through tough economic times, Raymond V. Gessel, Attorney at Law, says that one of the first things businesses do to stay afloat is to lay off employees. The idea is that layoffs will lessen the burden of having to pay out money when less is coming in. It’s simply a survival technique. But is this really the best solution to money troubles—letting employees go? The problem with this technique, as explained by the Kent, WA, business law practitioner, is that less workers means less productivity. And less productivity means less income for the business. Maybe laying off workers isn’t the best solution.
Gessel offers this alternative, one he thinks can work wonders for a business: Filing for bankruptcy. Ultimately, filing for bankruptcy could be a business’s ticket to continued and full operation—not partial operation with fewer employees. Bankruptcy stops creditors from chasing after the business’s assets. In turn, cash flow increases because all that money that is earned business-wide isn’t destined for creditors’ pockets.
When employees are laid off as a means for a business to stay afloat, that business is much, much less productive. Additionally, the presence of laid off employees thrown out into the market causes consumer problems, says Gessel. But in a Kent, WA, business law scenario where a business opts for bankruptcy, assets can be kept—assets like valuable, productive, intelligent, leading employees. And as Gessel has said, hanging onto employees is so much more beneficial to a company than throwing them out onto the street. Indeed, hanging onto them requires restructuring debt. But according to Kent, WA, business law, it could easily end up much more advantageous for a business to do the hard work of restructuring the debt than to keep letting employees go in the hopes that less salaries to pay will mean survival for the business. Indeed, less salaries to pay actually means less work being done, and less work done means a business is less and less robust and competitive over time. What kind of business is one where there’s only a small group of employees who made it through the layoffs? Now those few employees alone have to do all the work that dozens had done before.
There’s a reason Kent, WA, business law allows for bankruptcy. As Gessel says, bankruptcy keeps employees employed, and keeps a business competitive.
*Disclaimer: This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.