TW & Company, the security firm in charge of guarding the White House has filed for bankruptcy and an emergency request to transfer all its government contracts to a competitor, according to The Wall Street Journal.
The Maryland-based company filed for Chapter 11 bankruptcy Wednesday and sought to borrow $1 million to pay employees who are due a paycheck next week. The loan will come from a competitor that hopes to take over nearly two dozen government contracts for “armed and unarmed guard services for sensitive government agencies and facilities.”
TW & Company did not state the reason for their bankruptcy filing, but asserted that if they did not get the loan they would not be able to collect $5.3 million owed to them for services already provided.
Bankruptcy attorneys often recommend Chapter 11 for companies that need to reduce debt, but want to continue operations.
The bankruptcy lawyer for TW & Company said in court documents, “Due to its financial difficulties, the (company) is similarly unable to perform under certain existing contracts with the government and several commercial entities.”
Once TW & Company transfers over its contracts to Chenega Integrated Systems LLC it is unclear if they will have enough work to continue operating.
Bankruptcy is often the only option an insolvent company has to reduce or eliminate their debts. After careful consideration a bankruptcy attorney can determine which filing is in line with the needs of the troubled business.