Category Archives: Chapter 11
Prepackaged vs. Traditional Chapter 11 — Which Is Right for You?
For distressed companies seeking a path to financial stability, Chapter 11 bankruptcy is a powerful tool, offering the possibility of reorganizing debts while continuing operations. However, not all Chapter 11 filings are created equal. Business owners considering this relief must choose between two primary options: traditional Chapter 11 and prepackaged Chapter 11. Traditional Chapter 11 […]
How Chapter 11 Can Help Save a Failing Franchise
Franchise businesses, especially in industries like food service, hospitality and retail, often face heightened financial pressures. These can be due to high overhead — such as lease payments, royalty and advertising fees, payroll and inventory — combined with evolving consumer tastes, disruptive economic trends and internet business, which has shifted how customers interact with brands. […]
Business Bankruptcies Surge to Highest Level Since 2010
The U.S. economy is seeing an unprecedented rise in bankruptcy filings not experienced since the aftermath of the Great Recession in 2010. A confluence of rising operational costs, fierce competition from international companies and the relentless march of online commerce has left many companies, particularly consumer-facing ones, struggling to stay afloat. The Administrative Office of […]
Structuring a Chapter 11 Plan for Long-Term Viability
Crafting a successful Chapter 11 plan goes far beyond simply reducing a company’s debt. It requires a deep, strategic overhaul of the business’s financial and operational structure. The goal is to create a resilient enterprise that returns to solvency and can thrive for years to come. Here are some strategies for structuring the Chapter 11 […]
How Becoming a Debtor in Possession Changes a Business Owner’s Role
Chapter 11 bankruptcy is a remedy designed to help a distressed business gain debt relief, reorganize and return to solvency. A defining feature of Chapter 11 is that the existing equity owner often remains in control of the company as a “debtor in possession” (DIP). However, an important transformation occurs. The business owner’s role shifts […]
What Are the Chief Causes of Business Bankruptcies?
A significant risk for companies of all sizes and industries is that economic circumstances, some outside their control, will force them into insolvency. Such risks become more apparent as market forces and regulatory actions both home and abroad can affect a company’s prospects. Understanding the most common reasons for business bankruptcy can provide valuable insight […]
The Perils of Selling Customer Personal Data During Chapter 11
A distressed company enters into Chapter 11 bankruptcy seeking to reorganize its debts, streamline operations and satisfy creditors so as to emerge solvent. Sale of assets is one method of raising capital to succeed in this venture. Among the assets that may be evaluated for sale are digital resources, including databases containing customers’ personal information […]
Employment Considerations in Filing a Chapter 11
When a company files for bankruptcy under Chapter 11, its employees often face a turbulent and uncertain environment. The process of reorganization introduces a host of employment-related issues, and the choices made by the company’s leadership can have a significant impact on staff morale, productivity, and retention. The news of a bankruptcy filing is unsettling […]
How Equity Holders Can Protect Their Interests During Chapter 11
When a company files for Chapter 11 bankruptcy, its existing equity holders (such as shareholders) are typically at the bottom of the repayment hierarchy. In U.S. bankruptcy law, the order of claims is strictly observed: secured creditors are paid first, followed by unsecured creditors, and then, only if anything remains, equity holders receive payment. This […]
Using Exemptions in an Individual Chapter 11 Bankruptcy
Bankruptcy exemptions are legal protections that allow debtors to keep certain property out of the reach of creditors when seeking bankruptcy relief. While exemptions are most frequently associated with Chapter 7 (liquidation) and Chapter 13 (wage earner’s reorganization) cases, they are also relevant in Chapter 11 bankruptcies when the debtor is an individual, rather than […]
