Chapter 11 Bankruptcy

Chapter 11 Bankruptcy is a form of bankruptcy primarily utilized by businesses and some individuals who don’t meet the criteria for other bankruptcy chapters. In Chapter 11, businesses can continue operations while a plan to repay debts is approved by creditors and the court. Unless the judge deems it necessary, there is typically no trustee involved. At OlsenDaines, we specialize in assisting companies and individuals navigating this complex bankruptcy process.

When a Chapter 11 reorganization is chosen, the filing party retains full decision-making authority, allowing the business to continue operations initially. Subsequently, a reorganization proposal is formulated and presented to the court. This proposal often involves adjustments to the size and scope of the business. The filing party is granted a four-month “exclusivity period” to develop a comprehensive reorganization plan, with the possibility of an extension by the court for valid reasons. Upon acceptance of the plan, the debtor is obligated to adhere to all provisions and fulfill agreed-upon payments promptly.

As mentioned above, Chapter 11 Bankruptcy is typically sought by businesses or individuals with significant debt who wish to reorganize rather than liquidate. While it’s commonly used by corporations and partnerships, it can also be pursued by limited liability companies and some individuals. Contact our team of bankruptcy lawyers at OlsenDaines to evaluate your eligibility for Chapter 11 Bankruptcy and explore alternative debt relief options that may better suit your circumstances.

Filing for Chapter 11 Bankruptcy involves initiating a reorganization process where the filing party retains decision-making authority. During the process, a reorganization plan is crafted and presented to the court, often involving adjustments to the business’s operations and debt repayment structure. OlsenDaines can guide you through the intricate filing process and ensure compliance with all legal requirements.

The duration of Chapter 11 Bankruptcy proceedings can vary depending on the complexity of the case and the efficiency of the reorganization process. Typically, the filing party has four months to propose a reorganization plan, known as the “exclusivity period,” which can be extended by the court if necessary. Once a plan is accepted, the debtor must adhere to its provisions and fulfill agreed-upon payments in a timely manner.

Filing for Chapter 11 Bankruptcy offers several benefits, including the immediate protection of an automatic stay, which halts creditor collection efforts during the reorganization process. It allows businesses to continue operations while restructuring debt and offers a chance for financial recovery. However, Chapter 11 Bankruptcy is complex, involves inherent risks, and may entail significant legal costs. Our experienced team of bankruptcy attorneys at OlsenDaines can assess your situation and help you weigh the benefits against the risks.

Call us today to schedule your free consultation. We look forward to hearing from you.