Businesses are on alert; This is a shocking picture of business in Colombia

With the P182,000 million that Colchones Paraiso declared in 2021 as operating income, there have yet to be clear signs that it might reach liquidation, but it has happened. In 2019, it produced 500 mattresses a day, and employed 1,600 employees, of whom only 700 remain and none of whom have received salaries since October 2023. Now, they are starting to line up to demand their late payments, in the midst of the legal process that began to end the story of the company that succeeded and ended with it. It leads to bankruptcy.

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Founded in 2010, under the name Dream Rest Colombia, Paraíso mattress distribution company had 170 warehouses in the country and factory sites in several cities, especially in Bucaramanga, Cali, Medellin, Barranquilla and Cundinamarca province.

In January 2024, when the problems were already big, a labor protest arrived: a group of employees sat down with officials from the Ministry of Labor and representatives of the employer to obtain agreements on social security-related debts of current and former workers of the company.

This is just one of the social dramas that a company liquidation raises. Figures from the corporate watchdog show that at the end of 2023, the total number of business insolvencies – including reorganizations, implementation agreements and liquidations – was 4,473, a figure that is not only higher than in the previous three years, but also higher than in 2019, when the pandemic had not yet been declared.

Last year, 71.1 percent of cases were reorganizations and the remaining number were liquidations, according to the insolvency atlas unveiled by the entity. “This means that the majority are companies that take advantage of these operations to save themselves, enter into agreements with creditors, and even so that companies in liquidation can be returned to reorganization,” said Billy Escobar Pérez, corporate controller.

To read the full memo, here