Chapter 11 Bankruptcy

Our attorneys are continually involved in sophisticated chapter 11 bankruptcy cases representing business debtors (and professionals, including doctors, lawyers, accountants, salesmen, etc), unsecured creditors, secured creditors, banks, landlords, creditor committees, and trustees. We have a wealth of experience to advise our clients when chapter 11 is involved.

Debtor keeps control of business subject to certain limitations.

Objective is a Plan of Reorganization (basically, a settlement) proposed by the debtor and voted on by creditors, under which creditors receive payments according to the Plan. Typically, a percentage of the debt to paid in installments is offered in a Plan.

The Plan can provide for taxes to be paid out over a period of 6 years from date of Plan confirmation. Revenue agents seldom have the flexibility to allow such payments.

An Unsecured Creditors' Committee may be formed to monitor the debtor and negotiate the Plan. The Committee has an attorney and accountant paid for by the debtor.

Landlords and secured creditors have special rights to be paid before other creditors. Landlords must be brought current and kept current. Secured creditors are entitled to "adequate protection". Watch out for liens on receivables - the debtor can't use its own money without approval of secured creditor or court!

Corporations do not receive discharges, but all creditors are bound by the Plan.