Under a Chapter 11 Bankruptcy a corporate (or individual) debtor can restructure its business operations, continue to operate a business and reorganize its financial affairs. The reorganizations process is achieved by filing a plan and disclosure statement and getting them confirmed through the Bankruptcy Court. The goal being to that the business would continue to operate, provide jobs, satisfy creditors and produce a return for the owners.
The best way to achieve the Debtor's goals is to negotiate a consensual plan of reorganization with the creditors. A consensual plan is the least expensive and time consuming method of getting a plan approve in bankruptcy. However, it is not always possible to do this from the start.
With the primary goal to reorganize as quickly as possible, the Debtor along with counsel needs to be able to anticipate what the loosing issue are so that they can be resolve with an objecting creditor outside the courtroom. This could include everything from relief from the automatic stay with a secured creditor that wants to foreclose on a house. By using a stipulation, the Debtor can often get a better result than losing in court.
The Debtor also has powers within the bankruptcy court to reduce interest some creditors are charging , object to claims, force (or cram down) a plan of reorganization against an objecting creditor, sell assets at the best possible price and litigate aggressively to maximize assets of the estate.
A Debtor in possession has many options in a Chapter 11 Bankruptcy and can use the Bankruptcy Court to stay in business and become profitable. This can take the form of the Dodgers where they are selling a large portion of the assets or Crystal Cathedral where they sold the property but were allowed to stay as a tenant for three years, or to simply pay creditors a percentage of what they are owed and have the business continue to operate.
If you are interested in a free consultation as to how you can continue to operate your business during and after bankruptcy, please call the Law Office of Christopher P. Walker, P.C. at 714-639-1990. You can set up a free consultation at our office located in Northern Orange County, California at 505 S. Villa Real Drive, Suite 116, Anaheim Hills, CA 92807. We will be happy to discuss your options.