Chapter 11 Bankruptcy Attorneys
What is Chapter 11 Bankruptcy?
Chapter 11 is used by all types of businesses seeking to restructure their finances. It is also available to individuals. When a business can no longer pay its debt, it can seek protection under Chapter 11, thereby allowing it to continue to operate and control its assets as a debtor-in-possession while under the supervision and oversight of the Bankruptcy Court.
In Chapter 11, a wide variety of restructuring tools are available. The business can seek new financing, reject and cancel existing contracts, modify secured loans and even catch up commercial loans or leases that are in default. It can also take advantage of the automatic stay in halting pending litigation. However, if the debts exceed the available assets and it is otherwise unable to demonstrate an ability to reorganize, the business may be forced or converted into a Chapter 7 liquidation.
The business is required to submit a proposed plan of reorganization, which must be approved by the Bankruptcy Court and creditors. Most creditors have a vote in accepting or rejecting the proposed plan, and if objections cannot be satisfactorily addressed (thereby precluding them from accepting the plan), the case may be dismissed or converted, which may then allow creditors to enforce various remedies available under non-bankruptcy law. Approval of a plan may take as little as a few months, or as long as a few years before the company is able to successfully emerge from bankruptcy.
Why Chapter 11 Bankruptcy?
This form of bankruptcy can be helpful for businesses in a few ways:
For a better understanding of the advantages and disadvantages of Chapter 11 as they relate to your the financial condition of your business, whether it be a corporation, LLC, or partnership, CONTACT US or call us today at 214-609-8787 and ask for your FREE consultation. We can help to provide answers and get your business back on track!
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