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When Is a “Chapter 22” an Effective Remedy for a Company?
The informal term “Chapter 22” is used to describe a second Chapter 11 filing after a company falls short of emerging successfully from the first one. This can happen for various reasons, often related to unfulfillment of assumptions or expectations underlying the original Chapter 11 plan. Unlike other types of bankruptcy, there is usually no […]
What Are Your Responsibilities as a Chapter 11 Debtor in Possession?
A Chapter 11 debtor in possession (DIP) holds a unique and multifaceted role. As a DIP, you are not only seeking financial reorganization but also acting as a fiduciary, entrusted with managing the business and assets for the benefit of all stakeholders. This dual nature encompasses a wide range of duties and carries a considerable […]
Can Chapter 11 Provide a Company Relief from PPP Loans?
Small businesses that used the Paycheck Protection Program to keep their workforces employed during the COVID-19 pandemic may now be looking for ways to relieve their financial burdens. One path for relief is PPP loan forgiveness through the U.S. Small Business Administration (SBA). Alternatively, a company might be able to use Chapter 11 bankruptcy to discharge […]
Does a Business Bankruptcy Affect Your Personal Assets?
If your business falls into distress and you’re contemplating bankruptcy, you are naturally concerned about protecting your home and other personal assets from business creditors. Your ability to do so, whether your business is seeking Chapter 7 or Chapter 11 relief, depends in large measure upon the legal structure of the enterprise. If you own […]
Planning Exit Strategies Before Filing a Chapter 11
Entering into agreements with key creditor groups before filing a Chapter 11 bankruptcy can be of great advantage for a business debtor, especially a smaller company that is more likely to be impacted by the costs of a bankruptcy. This prearranged approach is often memorialized in a restructuring support agreement (RSA), a contract that outlines […]
What to Know About Attending a Virtual Creditors’ Meetings via Zoom
Creditors’ meetings —also known as Section 341 meetings — are a necessary stage of every Chapter 7 bankruptcy case. Their purpose is to make sure the information in the debtor’s petition is accurate and to find out if there are any facts or circumstances that might justify denial of bankruptcy relief. These meetings, which debtors […]
Prefiling Mistakes That Can Derail Your Bankruptcy Case
Bankruptcy, whether it be in the form of a Chapter 7 liquidation or a Chapter 13 debt reorganization, can provide a fresh start for individuals struggling with overwhelming debt. However, there are several errors debtors commonly make prior to filing their petition that can jeopardize the success of their case as well as trigger other […]
Bankruptcy Options for Small Businesses in Financial Distress
Navigating financial challenges is a common part of running a small business. But when the burden of debt becomes too heavy to bear, owners have legal alternatives to shutting down the enterprise. The primary bankruptcy options that allow small businesses to stay in operation are Chapter 11 and Chapter 13. Which option is best suited […]
Overcoming Creditors’ Objections to Chapter 11 Plan Confirmation
Chapter 11 bankruptcy is a legal remedy that allows businesses, both large and small, to reorganize and continue their operations while relieving some of their financial difficulties. The U.S. Bankruptcy Code requires that under a Chapter 11 reorganization plan, each creditor will receive at least as much as they would have in a Chapter 7 […]
What Is a Willful and Malicious Injury That Can Exclude a Debt from Bankruptcy Discharge?
Bankruptcy is a legal remedy that allows individuals and businesses to discharge most of their debts. However, there are some types of debts that are not dischargeable in bankruptcy, including those that are based on willful and malicious injury by the debtor. This exclusion of these debts in Chapter 7, Chapter 11 and Chapter 13 […]