The Collapse of Colchones Paraíso: From Success to Bankruptcy
Colchones Paraíso, once a prominent mattress distributor in Colombia, has now faced the harsh reality of liquidation. Despite reporting an operating income of 182,000 million pesos in 2021, the company’s downfall was inevitable. In 2019, Colchones Paraíso was producing 500 mattresses a day with 1,600 employees. However, as of now, only 700 employees remain, all of whom have not received salaries since October 2023. The employees are now lining up to claim their overdue payments as the company undergoes the judicial process of closure.
Founded in 2010 as Dream Rest Colombia, Colchones Paraíso had 170 warehouses across the country and factory locations in various cities. However, the company’s troubles came to a head in January 2024 when employees staged a protest demanding resolution of outstanding debts related to their social security.
The liquidation of Colchones Paraíso is just one of many social dramas that arise from the closure of a company. According to figures from the Superintendency of Companies, there were a total of 4,473 business insolvency processes, including reorganization and liquidation, at the end of 2023. This number is not only higher than in previous years but also surpasses the figures from 2019, before the pandemic was declared.
Last year, 71.1% of the cases were reorganization, with the remainder being liquidation. The Superintendent of Companies, Billy Escobar Pérez, highlighted that many companies use these processes to negotiate agreements with creditors and potentially return from liquidation to reorganization.
The collapse of Colchones Paraíso serves as a cautionary tale for businesses in Colombia facing financial difficulties. The full note on this story can be found here.