In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides insights into the implications of ASAP’s Chapter 7 bankruptcy filing.
Article Link: https://www.restaurantdive.com/news/asap-files-chapter-7-bankruptcy-ceases-business/712016/
Summary
ASAP, formerly known as Waitr, has ceased all operations and filed for Chapter 7 bankruptcy after a significant decline in revenue and order volume. The company, which had a presence in 525 cities and once peaked at over 51,000 orders per day, saw its revenue drop to just under $11.5 million in Q3 2023 from $25.1 million in the same period the previous year. The filing indicates that ASAP’s business model failed to sustain the company financially, leading to an inability to service its debt. Adam Stein-Sapir from Pioneer Funding notes that the Chapter 7 filing suggests there is no hope for the company’s rehabilitation, and it is likely that debt holders will see low recoveries.
- ASAP filed for Chapter 7 bankruptcy after defaulting on loan obligations and experiencing a sharp decline in revenue and order volume.
- The company’s revenue and orders had been decreasing for years, with revenue peaking in 2020 at $204 million and falling to $42 million for the last three quarters of 2023.
- Adam Stein-Sapir commented that the Chapter 7 filing indicates a severe problem with the business model and low recovery prospects for debt holders.
Q&A
What does a Chapter 7 bankruptcy filing indicate for a company like ASAP?
A Chapter 7 bankruptcy filing indicates that the company is undergoing liquidation and there is no expectation for the business to continue operating in its current form. It suggests a severe problem with the company’s business model and financial sustainability.
How does a Chapter 7 bankruptcy differ from a Chapter 11 bankruptcy in terms of debt recovery?
In general, debt holders tend to see lower recoveries in Chapter 7 cases compared to Chapter 11 bankruptcies. Chapter 7 involves liquidation of assets, while Chapter 11 focuses on reorganization and rehabilitation of the business, which can potentially offer better outcomes for creditors. For more information on bankruptcy and debt recovery, visit Pioneer Funding’s guide to selling a bankruptcy claim.
What are the implications for creditors when a company like ASAP files for Chapter 7 bankruptcy?
Creditors are likely to face significant losses as the company’s assets are liquidated to pay off debts. Unsecured creditors, in particular, are at risk of recovering little to nothing from their claims. Selling a bankruptcy claim to a trade claim buyer can be a consideration for creditors looking to mitigate their risks. For more insights on this process, click here.
