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Category Archives: Chapter 11

What to Expect When You File Chapter 11 Bankruptcy

Companies in financial distress may be able to use Chapter 11 bankruptcy to restructure and reduce debts, ultimately reemerging as healthier businesses. At one time, only large corporations could afford the costs of Chapter 11, but thanks to change in the Bankruptcy Code, many small businesses are able to take advantage of a streamlined version […]

When Can a Court Convert Your Chapter 11 Reorganization to a Chapter 7?

Businesses under financial duress can choose from two alternative courses in bankruptcy. If they believe they can reorganize and return to profitability, they can opt for Chapter 11. If not, then the path is Chapter 7, by which the business’s assets are liquidated and distributed to creditors and the company ceases to exist. A business […]

Obtaining Debtor-in-Possession (DIP) Financing During Chapter 11

studio shot of bankruptcy kit

Financially distressed businesses often lack enough cash to continue operating and can no longer borrow to meet their ongoing expenses. Creditors may cut them off from further advances, causing the business to default on its obligations. This has happened with great frequency during the COVID-19 pandemic, as many companies have seen drastic and devastating impacts […]

How Often Can You File for Bankruptcy?

Close up of bankruptcy petition with calculator and writing hand

If we have learned anything during the pandemic era, it is that things are more fragile than they seem. Global economies can be stopped in their tracks, threatening the financial health of millions of individuals. Many people who filed for bankruptcy in the past may find themselves in dire financial straits due to COVID-induced job […]

COVID-19 Complicates Estimation of Future Income for Subchapter V Reorganizations

Photos of the 2020 Coronavirus Aid, Relief and Economic Security Act alos known as the CARES ACT. Photos are not of the actual bill but a simulation of the bill.

The Small Business Reorganization Act (SBRA) offers a simpler and more affordable alternative to the traditional Chapter 11 bankruptcy process, which historically has been of little use to modest-sized companies. The SBRA procedure, known as Subchapter V, allows such businesses to create three- to five-year repayment plans based their “projected disposable income.” However, the recession […]

The Importance of Business Valuations in Chapter 11 Bankruptcies

Businessman reads Bankruptcy Chapter 11 book.

When a business seeks debt reorganization under Chapter 11, assessments must be made of the assets, debts, claims and general worth of the company. These valuations are difficult in normal times. The recession caused by the COVID-19 pandemic has added greater complexity. With the upheaval in financial markets, it is all the more critical to […]

Using Cramdowns to Advantage in Subchapter V Bankruptcy

Worried small business owner

Subchapter V is a simplified form of Chapter 11 bankruptcy that was created to make the reorganization process more accessible to small businesses. One advantage of Subchapter V is the reduction of a company’s debts through use of a procedure known as a cramdown. Subchapter V bankruptcy has become especially important during the COVID-19 pandemic. […]

Chapter 11 Relief Is Well-Suited to Times of Economic Crisis

United States legal documents focused on Chapter 11 Bankruptcy.

The COVID-19 pandemic has been financially devastating to individuals and businesses alike. The purpose of Chapter 11 bankruptcy is to give companies in financial crisis the ability to continue operating while restructuring their debt payments over time. In short, it gives a business the pause it needs to catch its breath and start working to […]

Should Small Business Owners Choose Chapter 11 or 13 Bankruptcy?

In California, many small businesses are facing increased financial difficulties due to tough economic conditions. For companies facing decreasing profits and large amounts of debt, bankruptcy might be the only option. Under current bankruptcy laws, there are two options for debtors who wish to remain in business — restructuring debt in Chapter 11 or building […]

In Bankruptcy, GT Advanced Attempts to Expose Apple’s Disclosure Requirements

GT Advanced Technologies, the company that was to supply Apple with scratch-resistant sapphire, is attempting to expose some of the details of its Chapter 11 bankruptcy filing. Originally, the company wanted to seal certain documents or file them in redacted forms. The information GT Advanced now seeks to release would allegedly describe the partnership with […]

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