WeightWatchers Bets on Prepackaged Chapter 11 Filing to Cancel out a Whopping $1.15B Debt

In its latest strategic move, WeightWatchers hopes to bring its financial health back on track. Going for a less-traveled route, the company has filed for a prepackaged Chapter 11 to erase a staggering sum of $1.15 billion in debt from its balance sheet.

Though generally viewed with apprehension, Chapter 11 bankruptcy can, in fact, prove to be a forward-looking action for companies grappling with significant amounts of debt. This type of bankruptcy allows them to continue operating while they work on a plan to repay creditors over time.

For WeightWatchers, a pre-packaged Chapter 11 filing offers the advantage of expedited proceedings. In this setup, the company goes to court with a predetermined agreement with its creditors regarding the payment or elimination of debt. This cuts down on the time spent in court and often results in less negative publicity.