Tag Archives: reorganization
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 […]
When Can Chapter 11 Plans Include Nonconsensual Third-Party Releases?
Nonconsensual third-party releases are clauses in a Chapter 11 reorganization plan that discharge certain non-debtor parties — such as the debtor’s officers, directors, shareholders, insurers, sureties or affiliates — from liabilities owed to creditors. These releases are nonconsensual because they bind creditors who do not consent to them, extinguishing their claims against these third parties. […]
Creating a Chapter 11 Plan That Is Likely to Win Confirmation
A Chapter 11 plan is essentially a contract between a company and its creditors, governing how the company’s debt will be reorganized and managed during the Chapter 11 case. Every plan must go through court approval, which generally requires that it be workable and in the best interests of creditors. In fact, creditors who believe […]
How Often Can You File for Bankruptcy?
Often, successful completion of a single bankruptcy case is enough to put a debtor back into solvency, but there may be further financial crises in store that require additional filings. There is no limit to the number of times you may file for bankruptcy, but there are limits on how often you can do it. […]
What Can Delay Completion of a Chapter 11 Bankruptcy?
Chapter 11 bankruptcy allows a financially struggling business to get back on its feet by reorganizing its debts. But there is no definitive timeline for the Chapter 11 process. Depending on numerous factors, winding up a reorganization plan can take anywhere from six months to five years or even longer. There are multiple procedural stages […]
The Importance of Business Valuations in Chapter 11 Bankruptcies
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 […]
Grounds for a Trustee Objecting to a Chapter 13
When a debtor files a Chapter 13 petition seeking reorganization of debt, the bankruptcy court appoints an impartial trustee to oversee the case. Part of the trustee’s job is to evaluate and approve the proposed plan for partial repayment of debts over a three- to five-year period. In some cases, a trustee will object to […]
