The Board of Directors of The Money Tree Inc., of Bainbridge, have announced that the company and some of its subsidiaries have filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Middle District of Alabama, according to company president Bradley D. Bellville.
The company will continue to operate its business as a debtor-in-possession.
“It is with great regret that we made the Chapter 11 filing late Friday,” Bellville said. “However, this filing allows The Money Tree to enhance its short-term liquidity while we confront this historically difficult environment for our business.
“We tirelessly pursued many different potential solutions to the challenges facing the company. We have done everything possible to try and protect the integrity of our investors and the company.”
As with many consumer lenders throughout the country, The Money Tree has been impacted greatly by the financial collapse and continued related economic downturn. Bellville said that many of The Money Tree’s customers are unable to pay their obligations when due, which, along with the losses created by these troubled loans, increased governmental regulations and increased investor redemptions, placed increased pressure on The Money Tree’s liquidity and financial position.
The Money Tree retained Warren, Averett, Kimbrough & Marino, LLC, a Birmingham, Ala.-based accounting and financial consulting firm, as an advisor to guide the restructuring. The Money Tree has already begun implementing a series of cost-cutting measures, including the merging of marginally-profitable branches, from 92 to 46 branches, which the company intends to continue as part of its reorganization.
The company’s subsidiary, Best Buy Autos of Bainbridge Inc., is not a party to the bankruptcy filing and intends to operate its business in the ordinary course.
“We will continue to focus on our core business and restructuring The Money Tree to fully realize our long-term strategy,” Bellville said. “We want to thank our customers, investors and employees for their loyalty, support and continued patience. We remain very proud of our contributions to our communities. In particular, we look forward to continuing our strong relationship with Decatur County and the surrounding area.”