If you own a business and are having financial difficulties, you may want to consider looking into Chapter 11 bankruptcy. While this branch of bankruptcy can be complicated, it can also be extremely beneficial if you want to restructure your business and keep it up and running. To successfully use Chapter 11 bankruptcy for this purpose, you will need to hire an attorney that specializes in both bankruptcy cases and commercial litigation. Here are three things you should understand about Chapter 11 bankruptcy and commercial litigation.
What Is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is not the type of bankruptcy individuals file. It is designed for businesses only, and for businesses that want to salvage their companies and continue running. The main goal and point of this branch of bankruptcy is to allow a business to come up with a plan with its creditors that will provide relief to the business.
In order to use Chapter 11, you will need to create a plan that will be effective for salvaging your company. This plan will involve asking your creditors to agree to different terms than what you currently have, but your creditors must also be willing to work with you.
Companies that use Chapter 11 are typically in debt over their heads. They may have good products or services to offer, but they cannot continue operating because of the negative cash flow they are experiencing. Through Chapter 11, a lot of companies are able to reorganize and restructure their assets and debts in a way that allows them to overcome their financial difficulties.
What Does the Plan Involve?
In order for your creditors and the bankruptcy court to accept your plan and agree to allow it, your plan must clearly illustrate how you intend to save your company. If the plan does not appear effective, your creditors may object to it, and you might have trouble using it to accomplish your goals.
Your plan will have to include every asset your company owns along with its value, as well as the balances you owe to all your creditors. Typically, Chapter 11 plans include asking creditors to:
In addition, you may need to agree to sell certain assets you have. This is often necessary and done to raise cash to use to pay off debts. If you are willing to do this, your creditors might be more willing to agree to modify the terms of your debts.
How Is Commercial Litigation Helpful for This?
Commercial litigation is a branch of law used to settle disputes, and it is commonly used when businesses file for bankruptcy. Not only will you need a firm that specializes in this, but your creditors may also hire their own commercial litigators.
Commercial litigation can be helpful for your bankruptcy case, because it is used to fight for what you want. A commercial litigation firm will work with you to create your Chapter 11 bankruptcy plan. This will involve fully analyzing your current financial position in order to help you come up with a plan to offer your creditors.
After the plan is revealed, a commercial litigator will represent you by fighting your battles in court. He or she will provide evidence and reasons the court and creditors should accept your plan, and this could help you get what you need to save your company.
Chapter 11 cases can be costly and time-consuming; however, they can also help business owners. If you would like to learn more about this, contact a firm that offers bankruptcy services and commercial litigation services through resources like http://wfactorlaw.com.
Share30 October 2015
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