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CodersLink Embraces Chapter 11 for Strategic Reorganization and Future Growth

Key Points:

  • Strategic Reorganization: CodersLink has filed for Chapter 11 to restructure its finances, ensuring long-term operational viability and growth.
  • Continued Operations: Business operations will continue as usual without interruption, maintaining all services and client contracts.
  • Path to Recovery: Detailed steps include negotiating with creditors, optimizing operations, and focusing on strategic growth areas.
  • Educational Insight: This release includes a clear explanation of Chapter 11 and its implications for business, providing valuable insights for startups.
  • Leadership Commitment: CodersLink leadership is fully engaged in the restructuring process, committed to transparency and open communication.

San Antonio, TX Friday, April 12, 2024 — CodersLink, a leading nearshore IT staffing company, has filed for Chapter 11 protection as part of a proactive step to ensure long-term viability and continued excellence in serving our global clientele. This restructuring is not an indication of closing our operations; rather, it’s a strategic maneuver to strengthen our financial foundation and accelerate our growth.

“At CodersLink, we view our Chapter 11 filing not as a setback, but as a proactive step toward securing our future and continuing to innovate in the tech staffing industry,” said Jesús “Tito” Salas, CEO of CodersLink. “This decision aligns with our commitment to sustainable growth and our responsibility to our clients, employees, and all our stakeholders.”

Understanding Chapter 11: A Strategic Reorganization Tool

Chapter 11 bankruptcy is often misunderstood and sensationalized by the media, leading the public to believe companies are going out of business. However, it is not a cessation of business but a restructuring type that allows companies to keep operating while they reorganize their finances under court supervision. This process enables a business to alter its debt obligations and emerge stronger.

Detailed Timeline and Narrative of Events Leading to Chapter 11:

  • Q1 2023: Challenges due to fluctuating FX rates led to the initial renegotiation of client contracts.
  • Q2-Q3 2023: Escalating FX losses prompted the strategic use of growth capital loans to maintain operations.
  • Q4 2023-Q1 2024: Further funding strategies were explored, including venture debt; however, facing limited success, we evaluated all available options.
  • February 2024: The decision to file for Chapter 11 was made after exhaustive exploration of alternatives, ensuring the best path forward for our company’s sustainability.
  • March 2024: CodersLink officially filed for Chapter 11, marking a pivotal step in our strategic reorganization efforts.

The Pathway to Exit Chapter 11:

Our exit strategy from Chapter 11 involves a structured reorganization plan that we will develop and submit for creditor and court approval. We aim to conclude this process within the next year, focusing on achieving sustainable profitability and operational excellence. This plan will be formulated with the insights and approval of our financial advisors, legal team, and stakeholders to ensure it meets all necessary criteria for a successful emergence from Chapter 11.

Impact on Operations and Client Contracts:

There will be no interruptions in our services. All existing contracts are in full effect, and we remain committed to delivering the high-quality staffing solutions our clients rely on. Our operational restructuring is designed to enhance our service offerings and client engagements without disruption.

Lessons for Startups: Navigating Financial Uncertainty

This experience provides critical learning opportunities for startups:

  • Risk Management: It’s crucial to have strategies in place for financial uncertainties, including foreign exchange risks.
  • Financial Planning: Maintaining flexibility in funding and capital management can safeguard against unforeseen economic challenges.
  • Strategic Resilience: Proactive and strategic planning is essential for navigating adverse conditions and turning potential setbacks into growth opportunities.

Commitment to Transparency and Ongoing Communication:

CodersLink is dedicated to maintaining transparency throughout this restructuring process. We will provide regular updates through our official channels to ensure that our employees, clients, and stakeholders are well-informed of our progress and plans.

Looking Ahead: A Stronger CodersLink

We are optimistic about the future and confident in our strategic approach to navigating this challenging phase. Our commitment to innovation, excellence in service, and community support remains unwavering. CodersLink will emerge from this restructuring more resilient and ready to meet the increasing global demand for tech talent.




Frequently Asked Questions (FAQs)

Q1: What does Chapter 11 bankruptcy mean for CodersLink?

A: Chapter 11 is a legal process that allows us to restructure our finances while continuing normal operations. This is not a liquidation bankruptcy but a reorganization that ensures we remain operational and committed to our clients and employees.

Q2: Will there be any interruption in services for CodersLink clients?

A: There will be no interruptions in our services. We continue to operate as usual, delivering high-quality staffing solutions and support to all our clients across the globe.

Q3: How will this affect the current contracts with CodersLink?

A: All current contracts remain in effect. Our Chapter 11 filing does not change the terms of client contracts, and we are committed to fulfilling all our contractual obligations.

Q4: What led CodersLink to file for Chapter 11?

A: The decision was driven by a need to manage significant financial strain caused by fluctuations in the FX rate between the U.S. dollar and Mexican peso, impacting our gross margins and net income. Chapter 11 offers a path to stabilize our finances and continue our growth trajectory.

Q5: How does CodersLink plan to come out of Chapter 11?

A: We have a clear reorganization plan that includes restructuring our debt, optimizing operational costs, and focusing on strategic growth areas. We are working closely with financial and legal advisors to emerge from Chapter 11 as a stronger, more resilient company.

Q6: Are there any changes in leadership or staff as a result of the filing?

A: There are no immediate changes to our leadership team or staff. Our team remains dedicated to providing exceptional service and supporting our clients and partners.

Q7: What should potential clients know about CodersLink during this period?

A: Potential clients should know that CodersLink remains a robust partner with a strong operational foundation. We are actively managing our financial restructuring to ensure long-term sustainability and continued excellence in service delivery.

Q8: How can stakeholders stay informed about the progress of the Chapter 11 process?

A: We are committed to maintaining transparent and regular communication with all our stakeholders. Updates will be provided through our official channels, including our website, press releases, and direct communications.

Q9: What message would you like to give to your employees during this time?

A: We value our employees immensely and are taking all necessary steps to ensure job security and stability. We are confident in our restructuring plan and the future of CodersLink. Your continued support and dedication are crucial during this period.