CHAPTER 11
Chapter 11 is an option for either businesses or individuals who would like to stay in control of the bankruptcy process.
For a Individuals
For individuals, a chapter 11 process is essentially a debt restructuring, where we will negotiate all of our clients’ debts at once by preparing a global payment plan. A Chapter 11 debtor, their legal counsel, and their creditors will progress through the bankruptcy process without handing over the reigns to a court appointed trustee.
For Businesses
For businesses, a chapter 11 filing can allow you to keep and use your assets and collateral during and after the bankruptcy process. It may entail restructuring payment plans, working to sell the business or conduct an orderly wind-down, while allowing the business to stay in control and in operation throughout the process.
Asset Sales
A key component of reorganization may involve the sale of assets free and clear of prior liens. A sale under §363 of the Bankruptcy Code is one of the most powerful pieces of “bankruptcy magic,” where even severely underwater businesses and assets can be sold and the buyer can “ride off into the sunset” with virtually no risk of any liability beyond the purchase price.
Reorganization Plans
In many cases, a business simply needs to renegotiate all of its debts at once by proposing a payment plan for creditors which in many cases can involve eliminating huge amounts of debt and interest payments in the process.
Orderly Wind-Downs
In other cases, a business just needs a little more time to wrap up its current commitments rather than abruptly shutting down. A Chapter 11 filing can buy valuable time and allow the business owner to stay in control of the liquidation process.