Tag Archives: chapter 11
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 […]
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 […]
Why Subchapter V Eligibility Has Become a Hot Bankruptcy Issue
Subchapter V, enacted in 2019, was designed to streamline the Chapter 11 process for small businesses with overwhelming debt loads. Offering a faster, less expensive reorganization, this remedy has surged in usage. But as filings have increased, so have disputes over which businesses can tap into Subchapter V’s benefits. Creditors are pushing back with eligibility […]
What Is the Typical Timeframe of a Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is a legal process designed to help financially distressed businesses reorganize their debts and regain solvency. Chapter 11 gives the business the opportunity to restructure its finances, renegotiate contracts and develop a plan for repaying creditors over time, rather than having to liquidate assets and cease operations. The Chapter 11 process is […]
Protecting, Monetizing and Leveraging IP Assets During Chapter 11
When a company enters Chapter 11 bankruptcy, it faces a critical juncture, one in which the primary goal is to obtain debt relief. The remedy also offers a chance to reorganize operations, improve its balance sheet and emerge as a stronger entity. Among a business’s greatest assets is its intellectual property (IP). Whether consisting 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 […]
High Court Ruling Curtails Use of Third-Party Releases in Chapter 11
The U.S. Supreme Court’s decision in what is known as the Sackler Discharge case has fundamentally altered how companies and their equity owners use Chapter 11 bankruptcy to resolve large-scale liability. The court definitively rejected the use of non-consensual third-party releases for equity holders or affiliates who are not themselves seeking a discharge through bankruptcy. […]
Assuming or Rejecting Leases and Executory Contracts in Chapter 11
A company in Chapter 11 needs flexibility to manage its obligations, including leases and executory contracts, in order to control costs, improve cash flow and enhance its prospects of emerging solvent after debt reorganization. As such, the U.S. Bankruptcy Code allows a debtor in possession to assume, reject or assign executory contracts and unexpired leases […]
DIP Financing in Chapter 11 Offers a Lifeline, But With Strings Attached
Debtor-in-possession (DIP) financing is a special form of loan that may be available to a company going through Chapter 11 bankruptcy. Its purpose is to enable the company to meet operational needs, payroll, supplier payments and other critical expenses and eventually emerge as a viable entity. This financing is often necessary because traditional sources of […]
When Can an Individual Debtor Opt for Subchapter V Reorganization?
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code, introduced by the Small Business Reorganization Act of 2019, was primarily designed to simplify and expedite the bankruptcy process for small businesses. However, it’s important to note that not only businesses but also individual debtors can qualify for this streamlined reorganization process if they meet […]
