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Chapter 11 Bankruptcy Legal in Metairie, Louisiana
Businesses that are insolvent and facing a large amount of debt may need to consider filing for bankruptcy. In some cases, bankruptcy is the only option for keeping a business’s doors open and regaining its financial footing. While there are different types of bankruptcy for businesses, Chapter 11 bankruptcy is one of the most common. To learn more about Chapter 11 bankruptcy and how a Metairie bankruptcy attorney can help, reach out to The Law Firm today.
What Is a Chapter 11 Bankruptcy?
Colloquially referred to as a reorganization bankruptcy, a Chapter 11 bankruptcy is designed for businesses that have enough assets and income to stay afloat and work with creditors to repay a portion of debts. What’s more, because a Chapter 11 is the most expensive and complex bankruptcy type, a business must have the resources to successfully navigate this type of bankruptcy. That being said, a Chapter 11 bankruptcy can be incredibly beneficial long-term — businesses like K-mart, General Motors, United Airlines, and other large corporations have filed for this type of bankruptcy in the past.
How a Chapter 11 Bankruptcy Works
Standing in sharp contrast to a Chapter 7 bankruptcy — where a business or individual liquidates what little assets they have in order to pay creditors — in a Chapter 11 bankruptcy, the business will work with creditors to create a reorganization plan that serves the creditors’ best interests. In order for a reorganization plan to be approved by the court, it must be fair and equitable, within the best interests of the creditors, be proposed in good faith, and actually be feasible and realistic.
If the business doesn’t propose a plan that is approved by creditors, then creditors will work together to design a plan. Examples of provisions of a restructuring agreement might include downsizing the business, selling certain assets, or renegotiating debts. The details of a Chapter 11 bankruptcy can play out in many ways, and each case is unique. In most cases, the business will continue operating throughout the bankruptcy case.
It’s also important to note that while a successful reorganization may be the goal, it doesn’t always work. If attempts to reorganize and stick to the plan that’s agreed upon by all parties involved in the bankruptcy case fail, a business may have to liquidate its assets, including intellectual property.
Work with a Metairie Chapter 11 Bankruptcy Attorney
One of the most important things to know about a Chapter 11 bankruptcy is that this type of bankruptcy is very complex when compared to other bankruptcy types. Legal representation is an absolute prerequisite when filing for a Chapter 11 bankruptcy. An attorney can help you to understand whether or not a Chapter 11 is the best option for you, what restructuring your debts might look like, what your rights and obligations are, and more. To learn more about Chapter 11 bankruptcies in Metairie, call The Law Firm directly today or send a message online.
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