Chapter 11 Bankruptcy
Chapter 11 bankruptcy is way for businesses to reorganize and stay afloat. A business which is still viable, but suffering from the strain of heavy debts may find Chapter 11 as their only option to survive. Under court supervision debts and contracts can be rescheduled and the business can continue to function.
Chapter 11 usually does not require a trustee, with the exception of circumstances where there is a suspicion of fraud or serious mismanagement.
When a potentially successful business is in danger of going under due to creditor actions such as foreclosures liens, lawsuits or outstanding invoices, Chapter 11 bankruptcy may be the option to save the business. If you find yourself in this situation, a free consultation with Park Center Law Group could be the first step to managing the company’s debt and turning the corner from potential disaster to potential profit.
Using Chapter 11, struggling businesses are able to renegotiate payment schedules or, in certain cases, seek an agreement with creditors to settle debts for a lower amount. Both the creditors and the court need to sanction any of these renegotiated settlement conditions.
Benefits of Chapter 11
Under Chapter 11, a business continues to operate but under the supervision of the court. No assets are lost and the business is protected against lawsuits. The business owner(s) must propose a plan to restructure the finances and pay outstanding debts. The owner(s) may also make a request to cancel certain obligations which are contributory factors to the financial problems, for example, an unfavorable lease obligation or overly expensive pension fund contributions.
The restructuring plan must be presented to a committee of creditors for their approval. However, even in a situation where the majority of creditors refuse to approve the plan, objections may be overridden by submitting the proposal to the court for final approval. Once the business is back on track, a petition can be made to close the Chapter 11 and return the business to being fully under the control of the owner(s).
Park Center Law Chapter 7 Bankruptcy Attorneys
If you’d like more information about Chapter 11 bankruptcy or would like to discuss your personal situation, let us help you. Contact Park Center Law to arrange a free and confidential consultation or call (855) 500-9001 to receive immediate assistance.