Tag Archives: bankruptcy
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 […]
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 […]
Preference Actions in Chapter 11: How to Defend Against Them
A preference in a Chapter 11 bankruptcy is generally defined as a debtor’s pre-filing transfer of property that unfairly favors one creditor over others. The bankruptcy code authorizes the trustee to bring an action to “claw back” the transfer and bring the property back into the bankruptcy estate. The purpose of a preference action, as […]
When Can Confirmation of a Chapter 11 Plan Be Revoked?
Once a Chapter 11 plan is confirmed by the bankruptcy court, it becomes the blueprint guiding the debtor’s future business operations and the distribution of payments to creditors. Confirmation is designed as a final, stabilizing event, on which debtors and creditors rely to plan their next steps. Due to its pivotal role, undoing or revoking […]
Preparing for Chapter 11: What to Do and What Not to Do
For a business facing financial distress, the weeks or months leading up to a Chapter 11 bankruptcy are often critical. The success or failure of a reorganization is frequently determined not by what happens in court but by steps or missteps made just before filing. Businesses unwittingly can undermine their own cases by delaying action, […]
Why the Disclosure Statement Serves as a Central Pillar in Chapter 11
In a Chapter 11 bankruptcy, the disclosure statement is a mandatory document that bridges the gap between a debtor’s reorganization plan and creditors’ rights to vote on that plan. Its function is to provide adequate information to creditors, enabling them to make an informed judgment about whether to accept or reject the proposed plan. The […]
Ways to Overcome Objections to Chapter 11 Plan Confirmation
Objections by creditors can complicate a Chapter 11 reorganization. In reality, though, objections to plan confirmation process can often be surmounted. Experienced attorneys routinely address them and many can be resolved without ever heading to a contested hearing. The following are common grounds for creditor objections to plan confirmation: Feasibility concerns — A creditor may […]
What Factors Bear on the Duration of a Chapter 11 Case
The duration of a Chapter 11 bankruptcy is among the chief concerns raised by business owners seeking debt relief. While Chapter 11 offers businesses flexible tools to restructure, its timeline is highly dependent on the company’s organization and financial situation. There is no universal average timeline, but several predictable factors can influence how swiftly or […]
How Small Businesses Keep Operating During a Subchapter V
Subchapter V is a special form of Chapter 11 bankruptcy that was created to give distressed small businesses a chance to reorganize and return to financial health. Key to this remedy is that a business is allowed to stay open. Owners retain control, operations proceed without interruption and debts are restructured into manageable payments, for […]
