Category Archives: Bankruptcy
Chapter 11 Filing Requires Intensive Documentary Preparation
A Chapter 11 bankruptcy allows a business in financial distress to reorganize and restructure its debts while continuing to operate, with the goal of returning to solvency. Filing for Chapter 11 is a complex process that requires substantial documentation. The bankruptcy trustee needs to have a complete picture of the company’s finances in order to […]
Availability of Chapter 11 Relief for Individuals
Chapter 11 bankruptcy is usually associated with business entities seeking to reorganize their debts and continue operations. However, individuals can also pursue this form of relief if their financial circumstances make other forms of bankruptcy, such as Chapter 7 or Chapter 13, unsuitable. This option may be viable for individuals with significant debt levels exceeding […]
Limits on Chapter 11 Debtors’ Use of Cash Collateral
In a Chapter 11 bankruptcy, the debtor is generally allowed to remain in control of their business as a debtor-in-possession. However, this control is subject to restrictions. One of these is prohibition of use of cash collateral, which refers to cash, securities, accounts receivable, inventory and other liquid assets that may be pledged as security […]
How to Combat Adversary Proceedings Objecting to Debt Discharge
An adversary proceeding is a case within a bankruptcy case. It is a lawsuit filed to resolve disputes during the bankruptcy process. One common scenario is when a creditor objects to the discharge of certain debts, asserting that those debts are not eligible for discharge under the Bankruptcy Code. Such proceedings are initiated by filing […]
When Might a Bankruptcy Court Appoint a Chapter 11 Trustee?
In most Chapter 11 bankruptcy cases, the company or individual filing for protection acts as a debtor-in-possession (DIP). The debtor retains control of the business and continues its daily operations under the oversight of the bankruptcy court. The debtor-in-possession has the fiduciary responsibility to manage the business in a way that maximizes the value of […]
When Is Bankruptcy a Better Remedy Than Debt Settlement or Consolidation?
When faced with overwhelming financial difficulties, individuals often consider well-advertised options like debt settlement and consolidation. These are ways to refinance and reorganize debt with the goal of making it more manageable. They may sound like attractive means of avoiding filing for bankruptcy, which many people view as a permanent blot on their credit rating. […]
What to Know About Chapter 11 Disclosure Statements
In Chapter 11 bankruptcy, the disclosure statement is a critical document required to be completed and filed by debtors. Its purpose is to provide sufficient information for creditors to make an informed judgment about the debtor’s proposed reorganization plan. Essentially, the disclosure statement ensures transparency, giving creditors enough insight to decide whether to support or […]
The Bankruptcy Automatic Stay: How to Make it Last
The bankruptcy automatic stay is a critical protection in both Chapter 11 and Chapter 13 bankruptcy cases, pausing all collection actions against the debtor once the case is filed. In general, the automatic stay remains effective for the duration of the bankruptcy proceedings. However, the stay can be lifted in certain circumstances, such as where […]
Can a Partnership Seek Bankruptcy While Its Partners Don’t?
Like any business entity, a partnership may seek bankruptcy protection when it is unable to pay its debts and risks insolvency. However, unlike a corporation, a partnership does not shield its equity owners from liability to creditors. So there are special issues that arise when the entity itself files for relief but the partners themselves […]
When Can a Company Do a Repeat Chapter 11 Filing?
Chapter 11 is meant to allow businesses to reorganize and continue operating while repaying creditors and to reemerge solvent. However, some companies face issues and setbacks that prevent achieving that goal. This may be due to overly optimistic restructuring plans, an inability to cut costs effectively or unexpected changes in the market. In such circumstances, […]
