Questioning The BlackBerry Bankruptcy

The once most popular Smartphone available, BlackBerry, has never really lived up to its fullest financial potential. Now as rumors surround the company’s probable bankruptcy amidst a $4.7 billion bailout offer, there is much to be said about its next move for financial help.

Losing Power

Since the Canadian company’s unveiling in 2007, Black Berry has struggled to fight a constant downward slope. Further erosion was met with the release of the iPhone, cause nearly a $ 1billion loss in a matter of months and a forced layoff of 40% of the company roster. After much deliberation, the company announced last week that it would be seeking the Canadian equivalent of our Chapter 11 bankruptcy. However, that may be easier said than done.

Although the $4.7 billion offer could stave off the need for the Chapter 11 equivalent Companies Creditors Arrangement Act (C.C.A.A.), there is speculation that the company could try their luck to remain as is. The problem with seeking C.C.A.A. is that BlackBerry may not be eligible under Canadian law. The law states that a company must be considered financially insolvent before entering C.C.A.A., but BlackBerry is currently reporting financial details far from insolvent. With a reported $13 billion in assets and only $3.7 in debt liabilities, BlackBerry may find that their financial position must be resolved elsewhere.

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