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Chapter 11 Bankruptcy
Chapter 11 bankruptcy is often called a “business reorganization” bankruptcy and is available to individuals, corporations and partnerships. It has no limits on the amount of debt, as Chapter 13 does. It is the usual choice for large businesses seeking to restructure their debt. Individuals usually file Chapter 7 or Chapter 13 rather than Chapter 11.
The debtor usually remains in possession of its assets and operates the business under the supervision of the court and for the benefit of creditors. The debtor-in-possession is a fiduciary for the creditors. If the debtor’s management is ineffective or less than honest, a trustee may be appointed.
A creditors committee is usually appointed by the U.S. trustee from the debtor’s 20 largest unsecured creditors who are not insiders. The committee represents all of the creditors in providing oversight for the debtor’s operations and a body with whom the debtor can negotiate an acceptable plan of reorganization.
A Chapter 11 plan is confirmed only upon the affirmative votes of the creditors, who are divided by the plan into classes based on the characteristics of their claims and whose votes are a function of the amount of their claim against the debtor.
If the debtor can’t get the votes to confirm a plan, the debtor can attempt to “cram down” a plan on the creditors and get the plan confirmed despite creditor opposition, by meeting certain statutory requirements.
Chapter 11 is probably the most flexible of all the chapters, and as such, it is the hardest to generalize about. Its flexibility makes it generally more expensive to the debtor. The rate of successful Chapter 11 reorganizations is extremely low, estimated at 30 percent or less.
Individuals usually reorganize under Chapter 13, which offers a streamlined plan at modest cost that allows the individual to keep possession of his or her assets, catch up on secured debt and discharge unsecured debt at the end of the plan.
At Janssen Law, PLC, in Des Moines, we help qualified companies navigate the Chapter 11 bankruptcy process.
Uniquely Qualified To Help With Business Bankruptcies
Bankruptcy attorney Dallas J. Janssen has extensive experience that directly correlates to his work in Chapter 11 bankruptcy, including his work on the other side of business bankruptcies as a creditors’ rights attorney. In that role, he advocates for banks, insurers and other creditors, protecting their rights to payment, negotiating the value of a secured claim or seeking an alternative to bankruptcy.
Dallas also recently completed six years of service as a Chapter 7 panel trustee in the U.S. Bankruptcy Court for the Southern District of Iowa. In that role, he reviewed bankruptcy petitions and documents, conducted creditor hearings, liquidated nonexempt assets and paid creditors. His attention to detail and thorough understanding of creditors’ rights benefit his Chapter 11 bankruptcy clients.
Timely Filing Is Essential
It is important to have a working relationship with your major creditors for a Chapter 11 bankruptcy to be successful. It is critical to file for Chapter 11 bankruptcy in a timely fashion. Waiting until the last minute limits the chances of success.
We will work with you to:
- Reduce the amount you owe to creditors
- Respond to creditor claims
- Extend the payment period if necessary
- Develop a reorganization plan that receives creditor approval and confirmation from the court
Let Us Start Working On Your Solution Today
We encourage you to call 515-421-9068 or use our online contact form to schedule a free one-hour consultation with a lawyer who emphasizes clear communication and cost-efficient solutions. We will review your situation and recommend an effective course of action.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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