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Century-old flower company pursues Chapter 11 bankruptcy

Too much debt is not a problem isolated to consumers. Despite their best efforts, some businesses in California find that they can no longer address their debts. This was apparently the case for FTD Cos., which recently filed for Chapter 11 bankruptcy.

In 2014, FTD -- a flower delivery company -- tried to acquire one of its rival companies, ProFlowers. FTD is more than 100 years old and has been struggling to keep pace with modern competitors. Acquiring ProFlowers was supposed to help the company stay relevant to its consumers while also eliminating the problem of its competitor eating into its profits. Unfortunately, the deal ultimately did not pan out and FTD never acquired ProFlowers.

Before the deal fell apart, FTD took on a significant amount of debt to buy ProFlowers. It was left with all of that debt and without any of the profits it was counting on from purchasing its competitor. FTD has continued to lose significant market shares over the past several years, especially as consumers have come to expect quicker and cheaper delivery of goods that the flower deliverer simply could not provide. Delivery charges that are otherwise standard within the floral industry may seem fairly steep to consumers who are used to the cheap delivery options provided by large retailers like Amazon.

Under Chapter 11 bankruptcy, FTD intends to auction away its various businesses so that it can pay off its debts. It owes upwards of $200 million for supplier bills and bank loans. This amount of debt can certainly feel overwhelming for California business owners, but just because a situation is overwhelming does not mean that it is impossible. Pursuing Chapter 11 bankruptcy can be a smart idea for businesses that have more debt than they can address.

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