Debt Reorganization/ Chapter 11

When your business struggles to make ends meet due to debts, debt reorganization or Chapter 11 bankruptcy can allow your company to restructure, catch up on debt payments, and get back on track as a financially healthier organization. Contact Gina H. McDonald & Associates today for an initial case evaluation to discuss your company’s options for reorganizing debts and resolving the business’s financial struggles.

Why Choose a Debt Reorganization/ Bankruptcy Attorney from Gina H. McDonald & Associates LLC?

Restructuring and resolving your business’s debts can involve complex legal and financial issues. As a result, your company needs experienced legal counsel to walk you through your business’s options and guide you during the debt reorganization or bankruptcy process. Turn to a bankruptcy attorney from Gina H. McDonald & Associates LLC to help your company with debt reorganization or Chapter 11 bankruptcy because:

Our legal team works hard to craft tailored legal solutions for your company’s unique circumstances.
We have a proven track record of helping corporate clients overcome debt problems that can jeopardize business owners’ success.
Our firm has over 25 years of experience handling bankruptcy cases, giving us the insights and knowledge to help you determine the best course of action for your company’s situation.

When you hire us, you can rest assured that your company will receive the best possible representation.

Understanding Chapter 11 Bankruptcy

Chapter 11 bankruptcy allows a business to reorganize its debts and operations to repay creditors over time and emerge from bankruptcy as a financially sound enterprise. In a Chapter 11 bankruptcy, the debtor remains “in possession” of its assets and can exercise the powers and duties of a bankruptcy trustee. A company that files for Chapter 11 will propose a plan of reorganization to the court, which will govern the company’s bankruptcy case by laying out how the company will reorganize its operations and repay its creditors.

A Chapter 11 bankruptcy begins with filing a petition with the bankruptcy court serving the federal district where the debtor company has a principal place of business. A Chapter 11 case may start with a voluntary petition – a petition filed by the debtor company – or an involuntary petition – a petition filed by the company’s creditors. Filing a bankruptcy petition imposes an automatic stay, which bars a debtor business’s creditors from initiating or continuing debt collection efforts, such as seizing/repossessing assets, pursuing foreclosure, or filing lawsuits.

A company may propose a plan of reorganization after the filing of a Chapter 11 bankruptcy petition or attach a proposed plan to a voluntary petition. The plan of reorganization can propose to shut down or sell off parts of the business. The plan also must classify debts and claims against the company and explain how the plan will treat each class of claim. Creditors who will receive less than the full value of their claim under a proposed plan of reorganization have the right to vote on whether to support the plan. A debtor business has an exclusive right to propose a plan of reorganization within the first 120 days after the filing of the bankruptcy petition; a company can petition the bankruptcy court to extend this period. After the exclusivity period ends, a creditor or creditors’ committee can file a competing plan. The bankruptcy court will evaluate proposed plans of reorganization and the creditors’ approval votes to determine whether to accept a proposed plan.

A business can propose to liquidate under a Chapter 11 plan. Liquidation in a Chapter 11 bankruptcy occurs under more economically advantageous circumstances than a Chapter 7 bankruptcy and allows creditors to take an active role in determining the liquidation of assets and distribution of proceeds.

Confirmation of a plan of reorganization discharges a business’s prepetition debts, leaving the company obligated to make payments as required by the plan. However, some types of debts do not qualify for discharge. A plan of reorganization may allow a business to initiate adversary proceedings to recover money or property for the bankruptcy estate, including filing avoidance claims to seek the return of assets or property the business transferred during a certain period before the filing of the bankruptcy petition.

What Other Debt Reorganization Options Do Businesses Have?

Businesses have additional avenues for resolving unmanageable debts. Other options companies may pursue to restructure debts include:

Negotiating Loan Modifications – Companies can try to negotiate changes to the terms of their loans to make debt payments more manageable, such as by extending the loan term, lowering the interest rate, or forgiving a portion of the debt (which may have tax consequences).
Refinancing – A business may replace a corporate loan with a new loan with more favorable terms, such as a lower interest rate, using funds from the new loan to pay off a previous loan.
Debt Consolidation Loans – A company might obtain a debt consolidation loan, which effectively consolidates multiple loans into a single loan payment. A debt consolidation loan can provide a lower single payment than the total payments due on the business’s existing loans.
Assignment for the Benefit of Creditors – Businesses may assign assets to a trustee to liquidate (sell) the asset and use the proceeds to repay creditors.

Which Options Should Your Company Choose?

Choosing the best path for resolving financial difficulties caused by corporate debt can involve various considerations. An experienced bankruptcy lawyer can walk you through your legal options and the pros and cons of each alternative to help your business make an informed decision. Some of the factors your business might consider include:

The extent of your business’s debs and the types of loans it has
Your company’s income, including whether the business has steady cash flows or inconsistent or seasonal revenue
The ability of your company to secure new loans or debts for refinancing or consolidation
The types of assets your business owns
The complexity of your business’s operations
The potential costs of Chapter 11 bankruptcy, including ongoing legal fees and other expenses while carrying out the plan of reorganization
The willingness of your business’s creditors to negotiate agreements to resolve the company’s debts, such as modifications to loan agreements or assignments for the benefit of creditors

How Can Our Firm Help You Resolve Your Business’s Debts?

When you choose the legal team at Gina H. McDonald & Associates LLC, you can expect our attorneys to help your company resolve its debt problems by:

Sitting down with your company’s leadership to discuss needs, concerns, and goals to begin developing a tailored legal strategy
Walking you through your business’s legal options and explaining what to expect in debt restructuring or bankruptcy to help you make informed decisions
Reviewing your company’s financial records to understand the nature of its debt problems
Preparing and filing your business’s Chapter 11 bankruptcy petition and proposed plan of reorganization
Negotiating with your company’s creditors to pursue a fair and favorable resolution of its debts
Guiding your business throughout the bankruptcy process, including representing the company in adversary proceedings and carrying out the plan of reorganization

Contact Our Firm Today for Experienced Advice and Support

When your business needs to undertake debt reorganization or file for Chapter 11 bankruptcy to manage unsustainable debts, a bankruptcy attorney from Gina H. McDonald & Associates LLC can provide the support and guidance you need. Contact our firm today for a confidential consultation with our legal team to discuss how Chapter 11 can help your business.