Chapter 11 Reorganization

Chapter 11 bankruptcy focuses on the reorganization of businesses, although individuals who operate as businesses may also qualify.  Chapter 11 is often selected for businesses or individuals who wish to continue operating, and who have a good probably of restructure their debts.  Both General Motors and Chrysler Group restructured using Chapter 11 of the Bankruptcy Code.

With some restrictions, Chapter 11 typically permits the debtor to propose a “plan” to deal with creditors, structured by class (meaning those with administrative priority, secured creditors, general unsecured creditors, and so forth).  During the bankruptcy, the debtor remains in possession of the business, and is authorized to continue operating it in normal fashion and without interruption.

Chapter 11 vests the debtor with some powerful restructuring tools, including the ability to reject executory contracts, restructure certain debts, and protect assets.

Davidson Law Firm has long practiced on behalf of both debtors and creditors in Chapter 11 cases, and knows well the tools in a debtor’s insolvency tool belt.  Davidson Law Firm assists troubled businesses utilize these tools to avoid collapse of the business structure, and works with creditors on plans to keep viable the business while treating the creditor fairly and in accordance with federal law.  Conversely, we work daily with creditors brought into a bankruptcy proceeding by a troubled debtor, insuring that our clients protect all of their claims and security to the fullest extent possible.  It is this duality of representation which makes Davidson Law Firm’s attorneys so adept in this most complicated area of bankruptcy practice.

Clients are well advised that Chapter 11 proceedings may be lengthy, and may require prior planning on behalf of debtors.  The larger the debtors financial holdings, the more planning which is generally required.  As the automatic stay of bankruptcy is not effective until the day the petition is filed, clients achieve optimal results by contacting Davidson Law Firm as soon as bankruptcy protection becomes even a potential option.  Through consultation, Davidson Law Firm can advise clients whether or not bankruptcy is the best solution.

If your business is troubled financially, or if you have been doing business with another company which files for Chapter 11 protection, please give the experienced attorneys ad Davidson Law Firm a call to see how we can apply our knowledge to assist you.

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