The Timeline for Completing Chapter 11: How to Avoid Delays

Chapter 11 bankruptcy offers a company the opportunity to get relief from debt, reorganize and emerge as a financially viable entity. It is a powerful remedy, but it can involve a lengthy process. A Chapter 11 can take anywhere from a few months to five years or more, depending on the size of the company and the complexity of the case.

The Chapter 11 timeline includes the following milestones:

• 6 months before filing — You must complete a credit counseling course from an approved counseling agency at least 180 days before filing a Chapter 11.
• Filing the petition —Along with your petition, you must include a list of creditors. The automatic stay goes into effect upon filing, which stops creditors from pursuing you further.
• First day hearing — Within 48 hours of the petition’s filing, there will be a court hearing on a series of “first day motions,” which ask the judge to issue orders that will keep the business operating. These orders may allow the company to continue paying wages or paying vendors, to retain bank accounts and to reject certain contracts.
• First meeting of creditors — Also called a 341 meeting, it usually happens 30 to 60 days after filing. The trustee asks you about your income, debts, property and other items. Creditors may attend but aren’t required to.
• Proposed reorganization plan — After negotiation and discussion with the trustee and creditors, you will file a proposed reorganization plan. This plan organizes creditors into classes and explains how you propose to treat each creditor. Any creditor that does not like the plan can object. You can then file a motion asking the judge to force the creditor to accept the plan, which is known as a cramdown.
• Plan confirmation — After filing the plan and handling objections and modifications, the judge will hopefully confirm your plan. Confirmation means you get permission to carry out the plan and pay creditors according to its terms. It can take upwards of two years to get some plans confirmed. Others are confirmed in under a year.

Consulting with a qualified California Chapter 11 attorney can help you avoid unnecessary delays caused by mistakes like failing to include a full list of creditors in your petition or miscalculating debts.

At the Law Offices of Michael Jay Berger, our Beverly Hills business bankruptcy lawyers know how to get Chapter 11 plans confirmed efficiently. Please call {PHONE} or contact us online to schedule a free attorney consultation and learn more about how we can help you.