Author Archives: Michael J. Berger
Assumption or Assignment of Executory Contracts and Unexpired Leases in Chapter 11
An important aspect of Chapter 11 bankruptcy for debtors and creditors is the treatment of executory contracts and unexpired leases. Chapter 11 gives the debtor in possession, or in some cases the bankruptcy trustee, significant power to decide the fate of such agreements, in which both parties still have unfulfilled obligations. The debtor might assume […]
Advantages of an Individual Debtor Choosing Chapter 11 Instead Chapter 13
A common misconception is that only businesses can use Chapter 11 for debt reorganization. But in fact, individuals seeking bankruptcy protection can use Chapter 11 to get back on their feet financially by completing a repayment plan over an extended period of time. Chapter 11 can sometimes be a more advantageous alternative than Chapter 13, […]
The Impact of Chapter 11 Bankruptcy on Employees’ Wages and Benefits
The goal of a Chapter 11 bankruptcy is to keep an insolvent company in business and by securing protection from creditors and reorganizing debt. This means creating a plan that allows the company to meet its expenses, including overhead costs like wages and benefits for employees. The decisions made during a Chapter 11 can fall […]
Common Adversary Proceedings in Bankruptcy Court
An adversary proceeding in bankruptcy is essentially a case within a case. It is a formal legal action initiated by one party against another party in the bankruptcy to settle a related dispute. Either party files a complaint detailing the reasons for seeking relief and the other party has the opportunity to respond. The proceeding […]
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 […]
