The recession and its aftermath have affected all types of businesses in all sectors. One of the sectors which have suffered due to the instability caused by the recession is the financial sector. Upon the virtual collapse of the U.S. economic system in Texas and elsewhere, stock trading firms were hit hard with huge losses. One of the stock trading firms that have deeply felt the effects of the recession is ThinkEquity LLC. Amidst a struggling economy, this firm has decided to file for Chapter 7 bankruptcy.
The firm does not believe that its clients will be able to bring any claims as a result of the firm's bankruptcy, according to the company's filing documents. The firm reported liabilities and assets ranging from $1 million to $10 million, according to the firm's bankruptcy petition. The company says it has been discussing the transfer of customer accounts with the Securities Investor Corporation and the Securities and Exchange Commission in order to ensure everything is in order.
The firm states that all customer accounts are in the possession of clearinghouses that made trades according to the instructions of the firm. ThinkEquity says that it is closing the stock trading portion of its enterprise, while its investment banking unit will be transferred to another financial firm. The firm's Chief Executive blamed the failure of the stock trading business on the current market slump.
Chapter 7 bankruptcy is a common choice in Texas for individuals and sometimes for large financial firms as well. This type of bankruptcy typically allows the petitioner to discharge all or some of its unsecured debts. To accomplish this, the petitioner's nonexempt assets are normally liquidated in order to repay creditors. This allows a bankruptcy filed to put the past behind and move on to the next chapter of his or her financial life a principle which is equally true of businesses seeking this form of bankruptcy protection.