Chapter 11 Bankruptcy: The Basics
Corporate and Business Bankruptcy Lawyers — Boston, Massachusetts
Most often used by corporations or businesses seeking financial breathing room and time needed to reorganize their companies — Chapter 11 bankruptcy is more flexible than other types of bankruptcy. It is far more complex and time-consuming, too. Few of them result in a successful reorganization.
If you own or operate a business and are considering Chapter 11 bankruptcy, the experience that our attorneys have can make a significant impact on your chances for a successful reorganization. For a free initial consultation — contact us.
How Does Chapter 11 Bankruptcy Work?
Debtors can initiate a Chapter 11 bankruptcy voluntarily or involuntarily by creditors who meet certain requirements. The Chapter 11 petition will include a full and honest disclosure of all assets and debts, current income and expenditures, outstanding contractual obligations including leases, and a full financial statement. A plan detailing reorganization and repayment schedules must also be filed with the petition.
At this point, the debtor assumes the role of "debtor in possession." In this capacity, the debtor retains full control and management of his or her assets and business operations while under the supervision of a court-appointed trustee. The debtor then remains in possession until the reorganization plan is approved, the case is dismissed or converted to Chapter 7, or the court determines that the debtor's management is ineffective or less than honest and decides to appoint a separate "case trustee" to run the business.
During this time, the trustee will appoint a council of the debtor's creditors (usually the seven largest unsecured creditors). The creditors' council consults with the debtor in possession about the case and monitors the debtor in possession's conduct and management of the business. The council also participates in formulating the official reorganization plan that will be submitted for its approval. Before any such plan is approved, the debtor must fully disclose his or her affairs again so that the creditors can have sufficient information on which to base their votes. Acceptance of the plan followed by confirmation and discharge can proceed from there.
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Our firm also deals with postpetition matters on a routine basis.
Call us in Boston, Massachusetts, or contact us online for a free initial consultation with an attorney. Office hours: Monday through Friday from 9 a.m. to 5 p.m. and by appointment. Cancellations and reschedules require a 24-hour notice or a $25 fee will apply.
