Our Dothan Chapter 11 Business Bankruptcy Attorneys Advise Business Clients in Houston, Henry, Coffee, Dale, Geneva, and Surrounding Counties
Chapter 11 is known as “reorganization” bankruptcy because it allows companies to restructure and coordinate with creditors under the bankruptcy laws of the United States. It is available to both individuals and businesses, but is most commonly utilized by businesses facing financial difficulties. For individuals, Chapter 11 is similar to a Chapter 13 proceeding. The bankruptcy petition may be voluntary or involuntary (filed by creditors that meet certain requirements). Unless a trustee is appointed, the debtor retains control of its operations and is called the “debtor-in-possession,” subject to the oversight of the court. Creditors can request that a trustee be appointed, to monitor the progress of the Chapter 11 proceeding. The debtor remains a debtor in possession until one of three things happens: either the reorganization plan is confirmed; the case is converted to Chapter 7; or a trustee is appointed.
The most common result of a Chapter 11 proceeding is the reorganization of the debtor’s business or personal assets, but Chapter 11 can also result in liquidation, in which all assets and liabilities are sold off and the business is completely dissolved. However, through an approved debt-repayment plan, debtors can emerge from a Chapter 11 after a few years of court-supervised debt restructuring, without facing dissolution. Usually, the trustee and debtor in possession coordinate to form a Chapter 11 plan, which is then voted on by the creditors. If the creditors approve the plan and the judge confirms it, the debtor must operate its business and pay its debts in accordance with the often strict requirements of the approved plan. If a plan cannot be agreed on by the creditors, the court will either convert the case to a Chapter 7 or dismiss the case entirely. In the event of a dismissal, creditors will pursue their claims outside of bankruptcy law. The reorganization process of a Chapter 11 proceeding can be a lengthy ordeal, and without the proper consultation and participation of an experienced Chapter 11 bankruptcy attorney, chances of success are slim.
However, with the help of the experienced Dothan Chapter 11 bankruptcy attorneys at Parkman White, LLP, a favorable outcome is much more probable. Call the Dothan legal team today at 334-792-1900 or email us for your consultation, and let us put our experience to work for you.