Chapter 11 bankruptcy provides court-ordered debt relief and financial restructuring for businesses and individuals under the Bankruptcy Code. Chapter 11 bankruptcy has saved many Connecticut businesses from closing their doors under the strain of seemingly insurmountable debt. It is an excellent solution for basically sound companies facing serious financial crisis.
Chapter 11 allows an owner to maintain operation of a business and reorganize through a court protection process when other methods of negotiation and out-of-court resolutions have failed. Through proper Chapter 11 relief, a business is enabled to continue normal operations, even in the event of lawsuits, levies, or attachments from all types of creditors.
Chapter 11 businesses and their owners are fully allowed to operate their businesses in the normal course as they did prior to the filing, but they enjoy full protection from collections or suits on pre-petition back bills. Regular bills, purchases and all customary business decisions are made regularly by the business owners, operators and employees. The operations and the operators of the business continue with all day-to-day transactions, incurring charges and paying current bills without Court involvement.
THE CHAPTER 11 BANKRUPTCY PROCESS
There are three basic stages to a successful Chapter 11 Reorganization:
Analysis and Filing: During this initial phase, all aspects of the business operations, including income and expenses, assets and liabilities are carefully examined to create a game plan for the entire case and the desired final results. Full preparation is followed by the filing of a complete Chapter 11 petition, supporting documentation and the initial outline of a future plan for the reorganized business. It provides a single forum for all matters related to the business.
Filing Chapter 11 provides an automatic stay or stoppage on collection actions while providing one local court for the disposition of all claims by or against the Chapter 11 company. It also provides a convenient forum for our Chapter 11 attorneys to dispute and resolve claims against company assets and promptly collect from parties owing money to the filing company. In the hands of an educated and experienced Chapter 11 counsel, a filing under Chapter 11 can save your life’s work.
Operating Period: Immediately upon filing, the company is relieved of all payments on past debt in full, and operates in the ordinary course without interference from past debt or debt service.
Chapter 11 provides the company a hiatus on all payments through a court-ordered period where no payments need to be made on debt incurred prior to filing. This provides the company or filing individual the necessary relief and time to reorganize. During this period, the company is free to operate its normal business without interference from creditors or the Court.
Plan of Reorganization Approval: During the interim period of operating the business without payment on prior debt, legal counsel and ownership determine the proper treatment of past debt obligations that were frozen on the date of filing. Debts are categorized in order of importance, prioritized for separate or group treatment under a Chapter 11 Plan of Reorganization. The Plan proposes treatment for each Class of creditors in accordance with various important factors, Classes are then required to accept the treatment or dividend on their pre-petition debt; or in some cases, vote for acceptance of the Plan of Reorganization. An approved or confirmed Chapter 11 Plan controls all creditors in the future by Court approval or a vote, and the Plan becomes binding through an Order of Confirmation.
All Chapter 11s have important ramifications, often to a lot of parties. They require expert preparation and experienced Chapter 11 reorganization counsel to assure a successfully reorganized and profitable future business.
You may want to consider Chapter 11 bankruptcy for your business debt if you face pressing financial concerns that threaten your company or personal financial future; including:
- Overwhelming debt payments
- Liability related to a lawsuit
- Tax problems with the IRS, state or local taxing authorities
- Bank or Lender lawsuits
- Landlord-tenant conflicts
- Inability to pay certain debt obligations
- High interest consumer debt obligations
- Interference with the financial health of your household
- Other business debt problems
Business Debt Problems Lead to Personal Debt Problems
All small business problems have a direct impact on the personal finances of their owners. At the Law Offices of Neil Crane, we know that business financial problems require a coordinated reorganization of the business and its owners. With proven methods and experience in all aspects of personal and business Chapter 11 proceedings, we produce a comprehensive solution to all your business and personal needs. We have over three decades of experience with out-of-court workouts, Chapter 7 Bankruptcy, Chapter 13 and Chapter 11 Bankruptcy Reorganizations.
Learn more about our small business bankruptcy services and how our Connecticut Chapter 11 bankruptcy attorneys can help you obtain the debt relief necessary to save yourself and your small business from insolvency.
Consult With Our Connecticut Small Business Chapter 11 Debt Relief Attorneys
We offer a free consultation regarding Chapter 11 bankruptcy. Please do not hesitate to call us today at 203-230-2233 or complete our online contact form to discuss your questions and concerns with an experienced business and personal debt relief attorney at the Law Offices of Neil Crane.