Staying in Business? What’s the Best Bankruptcy Option?
Business owners, like everyone else, sometimes make costly mistakes or experience a run of bad luck. If you find yourself and your business under a mountain of debt, bankruptcy may be a consideration. But what if you know that your problems are only temporary, that with a temporary respite from collections attempts and lawsuits, you can turn things around. What’s the best bankruptcy alternative?
The Chapter 11 Option—Reorganization
Chapter 11 reorganization is often the best option when a business can be saved as a going concern, but it threatened by debts from past mistakes or misfortune. In a Chapter 11 filing, the business owners and their attorney work with the creditors, putting together a plan that allows the business to keep operating as a new reorganized entity. The plan, when confirmed, replaces the existing debt structure with a new one usually involving extended payout and usually much lower partial payments to unsecured creditors. Getting these plans approved usually requires that a majority of the unsecured creditors holding at least 2/3 of the total value of unsecured claims have voted to approve the plan. Why would they do this? Because the debtor has offered them a better deal and a better outcome than just shutting the doors and selling all the assets. A successful Chapter 11 requires planning, good management, attention to detail, and the ability to fund the costs of reorganization. The road to success is well worn, but slippery. Having the right guide to get you through the process successfully is essential.
Contact Neuner & Ventura, LLP
We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at (856) 596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey