Like most New York businesses, operating a cloud storage enterprise is expensive. That reality, as well as frequent changes in leadership, contributed to Nirvanix’s recentChapter 11 bankruptcy filing. Initially, the company set a Sept. 30 deadline to remove all data stored in the cloud. However, they have since extended the deadline to Oct. 15. In addition, Nirvanix provided higher speeds of connectivity to help consumers retrieve their data.
Nirvanix’s bankruptcy filing allowed the company to continue providing services so that the monumental data transfer could run more smoothly. The move came as a surprise since only a year ago, the technical company was well-funded as well as on the cutting-edge of new cloud technologies. The company’s website was changed to encourage customers to seek cloud storage from four alternate providers.
Chapter 11 bankruptcy allows a business to seek court protection from its creditors while its financial affairs are reorganized. While Chapter 11 is most frequently used by small businesses that wish to stay in business while reorganizing debt, the general population is most familiar with Chapter 11 because of large corportations, such as General Motors, that have used it to reorganize.
Reorganizing under Chapter 11 often includes modifying the terms of a debt, such as the payment terms and even the financial obligations. This reorganization is designed to help the business reconcile its expenses and income while still functioning. Sometimes this reorganization includes downsizing or liquidating some assets to make payments to creditors or to make the business more profitable. When a business faces financial hardship, a bankruptcy attorney may begin the filing process.
Source: Wired, “IBM Cloud Storage Partner Nirvanix Files for Bankruptcy“, Klint Finley, October 02, 2013by