After five years of PI operations, the economy began to slow due to inflation and rising interest rates resulting in rising prices for consumer goods and a marked reduction in discretionary spending. Also, consumer credit has been affected by late payments and defaults.

This had a three-pronged negative effect on PI business including:

• a significant reduction in new contracts for paint jobs;
• a steep jump in the price of paint; and
• many customers to whom credit was extended began falling behind on payments and in some cases defaulted on their credit agreements.

These conditions severely hurt PIs financial condition. PI experienced a loss during the first quarter of the current year; the forecast for the next quarter does not indicate any improvement. Consequently, the PI owners asked their accountants for a complete audit of the companys books.

After meeting with their accountants, Jo, Maddy and Taylor asked BCA about options that are available to mitigate their losses, including whether to file for bankruptcy or explore other remedies.

Pat and Gale asked you to research possible options available to PI and prepare a Power Point presentation for PI regarding your findings.

Part I. Bankruptcy Options

Research and analyze the two bankruptcy options available to PI.

A. Bankruptcy Option 1:

• Explain in detail the requirements for this type of bankruptcy and the steps required in the filing process.

B. Bankruptcy Option 2:

• Explain in detail the requirements for this type of bankruptcy and the steps required in the filing process.

Part II. Options other than Bankruptcy

Research, analyze and explain possible options available for PI outside of filing for bankruptcy.

A. Option 1:

B. Option 2:

Etc.

Part III. Recommendation

Recommend a course of action for PI and explain why it is the best option for PI.