Chapter 11 Bankruptcy
As a business owner, financial problems can be especially concerning. While filing bankruptcy may be viewed as the end of the line for businesses, Chapter 11 can actually provide an opportunity to save a company. A well-crafted plan can offer the opportunity to rethink operations, recover assets, terminate contracts and leases that were weighing down profitability, and ultimately reduce the business’ debt.
The type of bankruptcy filed most often by corporations is Chapter 11. Chapter 11 bankruptcy was developed specifically for financially-troubled businesses, allowing it a period of time to reorganize debts while continuing operations.
Filing Chapter 11 bankruptcy puts an automatic stay on all debts owed by the business, meaning that creditors are temporarily barred from taking further action to collect on the pre-petition amount they are owed.
Businesses that file Chapter 11 will not be appointed a bankruptcy trustee to control their assets. Instead, the business owner will be considered a "debtor-in-possession." This position allows the business owner the opportunity to develop his or her own plan, subject to court and creditor approval, to discharge some financial obligations and repay others through the sale of assets or future profits.
Proper planning with an experienced bankruptcy attorney from the early stages can make the difference between saving or losing your business. The attorneys at Tully Rinckey will review your financial situation and help establish a plan to control the process and keep operations running.
For a free initial consultation with an experienced bankruptcy attorney, call our offices at 518-218-7100 or send an email to info@tullylegal.com.
