WHAT IS CHAPTER 11?
For businesses plagued with insurmountable debt Chapter 11 may provide a remedy. Designed to give businesses a fresh financial start, this form of corporate bankruptcy allows business owners to still remain in control of the daily operations and regain profitability.
Generally, a Chapter 11 bankruptcy matter may take anywhere between a few months to a couple of years. It all depends on the complexity of your case.
EFFECT OF BANKRUPTCY ON THE BUSINESS OPERATION
Most business owners are reluctant to enter into a Chapter 11 bankruptcy because they fear of losing control of the business. While there are certain business decisions that will require court approval, the business owner still controls what is deemed “the normal daily operations.” Actions such as the sale of assets, changing the terms of rental and lease agreements or stoping or expanding the business will require Court approval. In addition, any decisions about retaining and paying attorneys, and entering contracts with unions and vendors have to be approved by the Court.
A major part of reorganization process is proposing the reorganization plan to the Court. Some strategies may involve downsizing and renegotiating with creditors. If the court decides that the plan is reasonable and is in the best interest of the creditor, it will be approved and the process will forward. The debtor always has first preference when proposing a plan.
There are instances when a filing bankruptcy may not be the best debt relief strategy for your business. Schedule a free consultation with one of our business debt relief lawyers today to discuss your options. After thoroughly analyzing your situation, we can assist with:
SBA Loan Relief
Settle Business Loan Debt
Small Business Debt