Category Archives: Chapter 11
Selling Assets of a Distressed Business Through Section 363
During a Chapter 11 proceeding, a debtor that continues to operate the business and control company assets may seek court approval for a Section 363 sale. This court-supervised auction process allows the debtor-in-possession (DIP) to sell selected assets quickly, free and clear of liens, claims and other encumbrances — something that is often difficult or […]
What Chapter 11 Filers Should Know About Personal Liability
Unless a business is established as a sole proprietorship or general partnership, owners typically can avoid personal liability for most business debts. If a corporation or limited liability company (LLC) files a Chapter 11 bankruptcy, owners generally do not put their personal assets at risk. There are exceptions, however. Personal liability may still attach in […]
What to Learn From Recent Retail Chapter 11 Filings
Many distressed retailers turn to Chapter 11 to restructure and survive. Recent filings by retailers illustrate how companies can cut debt, streamline operations and concentrate on their most profitable business lines, thereby re-emerging as leaner, more competitive businesses. In the first quarter of 2026, business bankruptcies were at their second-highest level since 2010. Small businesses […]
Using Chapter 11 to Restructure Tax Debt
For many business owners, tax debt is not the result of poor planning but rather of income shortfalls, unexpected expenses, sudden economic downturns or other financial pressures that make it difficult to keep up. Chapter 11 can offer a path to tax relief, allowing a business to reorganize certain tax debts while continuing to operate […]
How Restaurants Can Use Chapter 11 to Renegotiate Leases
Restaurants are particularly prone to earnings downturns, which together with high rent and other obligations can push them to the brink. Chapter 11 is designed to help businesses continue operating while restructuring their debt and expenses. One of its most valuable features is giving owners a remedy for a lease or other rental agreement that […]
Strategic Use of a Single Asset Real Estate (SARE) Chapter 11
A Single Asset Real Estate (SARE) Chapter 11 is a remedy by which certain distressed property owners can stop foreclosure and pursue refinancing or other solutions. A debtor is generally classified as a SARE when substantially all of its income is generated by a single real estate asset and it does not conduct any other […]
How Medical Practices Can Use Chapter 11 to Survive Cash Shortfalls
Medical practices can fall into financial straits despite having a steady stream of patients. Cash flow can be strained by high payroll expenses, increasing malpractice insurance premiums, constantly delayed insurance reimbursements and the need to buy or lease expensive equipment. Unexpected cost overruns can quickly erode a practice’s profitability, particularly when reimbursement rates fail to […]
How First-Day Motions Can Be Integral to a Successful Chapter 11
First-day motions are expedited requests filed at the outset of a Chapter 11 case to address immediate operational needs. Their purpose is to stabilize the business, maintain continuity and preserve the value of the estate during the critical early stages of the bankruptcy process. First-day motions — so named because they are typically heard within […]
The Role of the Creditors’ Committee in Chapter 11 Cases
A creditors’ committee is a central feature of a Chapter 11 bankruptcy case. It is a group of unsecured creditors charged with protecting the interests of all unsecured creditors, whose claims may be reduced or discharged under the reorganization plan. The committee serves as a safeguard, providing oversight of a debtor in possession and helping […]
How Retailers in Chapter 11 Can Exit or Assign Costly Store Leases
Commercial leases are often among the most pressing financial obligations for retailers facing economic distress. Leases can run from three to 10 years, making them a significant financial liability when a sales location no longer generates enough revenue to cover rent and operating costs. Percentage rent clauses and co-tenancy requirements can further keep retailers tied […]
