Barwood Inc., a Montgomery County-based taxi service that serves Baltimore/Washington International Thurgood Marshall Airport and Baltimore, voluntarily filed for Chapter 11 reorganization Monday in the U.S. Bankruptcy Court in Greenbelt.
The company is seeking to change its business to cope with stricter government regulations.
Chapter 11 reorganization involves restructuring some debts and shedding others, said Brett Weiss, a bankruptcy lawyer in Maryland and Washington.
Charlie Maier, spokesman for Barwood Inc., said the company has $8 million in assets and $7.5 million in liabilities.
There is also a $1.5 million unsecured claim, Weiss said, but a reorganization can end unfinished contracts such as leases or loans, depending on the details of the case.
While some business file for financial reasons to avoid needing to shut down, Barwood?s attorney said the recent filing is unusual.
“It?s more regulatory related than financial related,” said Alan Grochal, of Tydings and Rosenberg. “There was local legislation [that increased license scrutiny and extended a waiting period] in Montgomery County that had a severe impact on the company, and that?s what it stems from.”
In a statement, Barwood chief executive officer Leo Barnes said the regulations extended license waiting periods, forcing drivers to find jobs elsewhere.
Barwood will have to submit a detailed financial summary and reorganization plan, a “disclosure statement,” to its creditors at an open meeting, Weiss said. The creditors will then vote on the plan, and if approved, the court must also sign off on it. The process can take anywhere from months to years, Weiss said.
