Well-known advertising agency reveals the reasons for filing for bankruptcy

Well-known advertising agency reveals the reasons for filing for bankruptcy
Well-known advertising agency reveals the reasons for filing for bankruptcy

The advertising agency is going through a difficult economic situation Globalrecognized in the field of advertising and marketing.

A few days ago, the company presented a voluntary liquidation applicationwhich in other words translates to filed for bankruptcy.

Go to the next note

Through a lawsuit—obtained by Meganoticias.cl—, his lawyers detailed the reasons for his complex financial scenario. The reasons are similar to those that entities from different sectors have presented to the court.

Why is Glöbal filing for bankruptcy?

According to the document, the marketing agency—which carried out campaigns with well-known brands such as Entel, Chilexpress, BCI, among others—maintained a functional structure for more than a decade that allowed it to grow in a highly competitive business.

THE LAST

However, “as a consequence of the restrictions associated with the coronavirus pandemic, many clients of the agency indicated that presented operational losses that would force them to dispense with the company’s services“.

Another part of the clientele requested a fractionation or reduction of services provided, along with the proportional reduction of the amounts to be collected. There were also those who requested an increase in benefits, but without the rate increasing.

Reference image (Freepik)

Loss of two tenders liquidated efforts

Faced with the bad context, Glöbal modified its operation in the hope that the national economy would recover in the short term. In fact, one of the decisions that was made was do not carry out mass separations“but rather it was decided to maintain the operational organization chart, assuming it as a temporary burden that would be compensated or corrected with national reactivation,” the lawsuit states.

To pay for this determination, the agency’s own share structure injected resources intended to cover payroll, general expenses and expenses.

The consequence of this was a “fragile structural balance“which lasted between two to three years, but what ended up defeating the efforts was the loss of two tenders in which the company “presented itself with good award options”, which was not enough.

“This unfavorable scenario caused a unsustainable downward projection of future income. Furthermore, and as a consequence of these results, several clients decided to dispense with their services, leaving the company in a state of complete non-viability“says the debtor.

Cover of the Global website.

Irrecoverable debt

Although it is ensured that Glöbal has carried out analysis and efforts necessary to reactivate social businesses, he argued that “the debt level is irrecoverable“, although without specifying the debt figure.

In line with the above, he stated that these events “constituted a decisive blow for the activity, generating unaffordable debts“. The main consequences that motivate your bankruptcy request are:

  • Be subject to extrajudicial and judicial collections
  • Losing the status of subject of bank credit,
  • Closing your factoring or factoring portfolios.
  • Reaching a point of no return in its economic and business viability.

Finally, it states that currently “is not able to meet its liabilitieslacks activities that generate future income and is experiencing an insurmountable crisis with respect to all its monetary obligations.

 
For Latest Updates Follow us on Google News
 

-

NEXT The airlines rebel against the 150 million fine and warn that “there will be no changes” to the charge for cabin luggage