Chapter 11 Bankruptcy Steps
Chapter 11 bankruptcies usually take between one and two years to complete. The company files for bankruptcy and then a reduction of obligations is negotiated with creditors. Creditors will usually be more open to Chapter 11 since the alternative, a Chapter 7 liquidated bankruptcy, will usually give them substantially less returns. The company is then reorganized to ensure profitability. Creditors are allowed a say in how the company is reorganized and the Court approves the final plan.
This process is supervised by a Court appointed trustee to ensure there is equity and fairness in the process. The Court will have special authority over all matters that do not have to do with the day-to-day operations of the company and would have to authorize sales of property, mortgage arrangements, major changes in business operations, reorganization of company operations, and other actions that significantly change the company’s operations.
Chapter 11 bankruptcies allow individuals to retain control of their company and put them back on the road to financial profitability. Consult with our lawyer to learn if Chapter 11 is right for your specific situation. A good lawyer knows how the company should be restructured and debt reorganized to ensure that the company is brought out of debt as efficiently as possible.
Contact The Diamond Law Group today to learn more.