Filing Chapter 11 Bankruptcy in Laredo, Texas
Chapter 11 of the Bankruptcy Code allows businesses to restructure and reorganize their debts so they can remain in business. By filing under Chapter 11, the company has a way to avoid closing and liquidating the business. You retain control of your business assets and the operations of your business as a debtor-in-possession. You continue managing your business unless a trustee is appointed in your case or you convert to a Chapter 7 liquidation bankruptcy.
However, filing under this chapter can be a complex undertaking. You need an experienced Laredo Chapter 11 bankruptcy attorney to handle your case. The future of your business is at stake — trust an experienced bankruptcy attorney at the Law Offices of Martin Seidler to handle your case. Call (800) 967-7317 to schedule a free bankruptcy consultation now.
Chapter 11 is Not Only for Huge Corporations
Most people associate a Chapter 11 bankruptcy case with large corporations that experience financial problems. However, Chapter 11 is also available to smaller companies and family-owned businesses. For a small business owner, filing a Chapter 11 petition can keep the doors open for loyal customers. If your business is still thriving, but you just need to restructure some debts to continue operating, a bankruptcy case may be the solution you need.
Chapter 11 Reorganization Plans
A Chapter 11 plan is much more complex than a Chapter 13 plan because you are dealing with complicated business issues. The plan often has numerous sections that break down creditors by certain classes. The debts of each class are handled differently. The ability to restructure certain debts can allow for better cash flow to pay bills and operating expenses. Your business plan is based on the specifics of your business and financial situation; therefore, the plan is designed to accommodate your business needs.
With a Chapter 11 plan of reorganization, you can:
- Stop foreclosures and repossessions
- Stop lawsuits to collect debts or evict your business
- Operate your business and have control over your business assets
- Give your business the cash flow you need to continue operations
- Catch up past due employee wages and benefits
- Restructure some debts to reduce interest rates and monthly payments
- Protect assets and equity in assets
- Develop a plan that creates affordable monthly debt payments that leave enough money for monthly overhead
Other benefits may apply in your case because each business is difficult and unique. Martin Seidler, a Laredo Chapter 11 bankruptcy lawyer performs a thorough and comprehensive analysis of your business to determine the best terms to include in your plan of reorganization. As part of your plan, you may liquidate non-critical assets, surrender assets you no longer need to operate the business, reject leases and executory contracts, and modify loan terms.
As part of your proposed Chapter 11 plan, you must submit a detailed disclosure statement to creditors. The disclosure statement outlines the history of your business and how you intend to reorganize the business to remain profitable. The disclosure plan is designed to provide creditors with sufficient information to make an informed decision whether to vote in favor of the plan.
Creditors Vote to Approve or Decline the Plan of Reorganization
Unlike a personal reorganization under Chapter 13, the creditors in a Chapter 11 case vote on whether to accept or decline the terms of the proposed plan. Part of our job as your attorney is to negotiate with individual creditors and classes of creditors for votes.
Negotiations may result in several amendments to the plan before a final plan of reorganization is presented to the court for approval. Negotiating with creditors and their attorneys is a crucial step in developing a workable plan that is acceptable to all parties. Martin Seidler is a skilled negotiator in addition to being a Laredo Chapter 11 bankruptcy lawyer with over 40 years of experience. He negotiated a Chapter 11 Plan, which was confirmed by the Court that restructured a medium-sized San Antonio aircraft maintenance company’s IRS debt of 1.2 million dollars. This debt was to be paid at 4% interest over five years. A debt to the State Comptroller of several hundred thousand dollars was also to be repaid over five years. The $600,000.00 in unsecured creditors were to receive only a small percentage of their allowed claims. The company had little choice but to seek relief under Chapter 11 as both the IRS and the State Comptroller had levied on the company’s bank accounts and threatened to foreclose their tax liens and sell the company’s assets effectively putting it out of business and impairing its ability to repay its debt. The confirmed Chapter 11 Plan prevented this and allowed the debtor to restructure its debt. The debtor was fortunate to have sufficient cash flow to propose a feasible plan.
Many businesses have negative cash flow and declining revenues. These are usually not candidates for a Chapter 11 filing. In those cases, a chapter 7 liquidation may often be more appropriate.
The Role of the Bankruptcy Court in Chapter 11 Cases
Chapter 11 cases are much more complex than other cases filed under Chapter 7 or Chapter 13. Therefore, the court often plays a more significant role in Chapter 11 bankruptcy cases. In addition to conducting hearings on various motions and other matters, the court may exercise control over a business under the following circumstances at the request of the debtor or a party at interest:
- Terminating existing leases and entering new leases and contracts
- Expanding business operations
- Liquidating assets other than in the normal course of business
- Approving agreements with vendors, unions, and other parties
- Reviewing the payments to attorneys, accountants, tax specialists, payroll companies, and other professionals
- Reviewing and approving financing arrangements
- Termination of business operations
- Confirmation of the Plan of Reorganization
The level of control exercised by the court will depend on the circumstances of the case.
Can Individuals File Under Chapter 11?
Yes, in some cases an individual may need to file a case under this chapter of the Bankruptcy Code because the individual does not meet the debt ceilings in Chapter 13. Typically, only individuals with substantial assets, including real estate holdings, have debts that exceed the limits of a Chapter 13 filing.
Individuals, corporations, partnerships, family-owned business, small businesses, and other business entities can file under this chapter of the Bankruptcy Code. Businesses that file under this chapter of bankruptcy can continue to provide jobs, services, and products for individuals within the community.
Contact a Laredo Chapter 11 Attorney for More Information
The Law Offices of Martin Seidler has the experience and knowledge required to handle a complex Chapter 11 bankruptcy case. With over 40 years of experience as a Bankruptcy lawyer, who also served as a Chapter 7 Bankruptcy trustee and Chapter 13 Bankruptcy trustee for many years. You can trust that Attorney Martin Seidler will aggressively fight to protect the best interest of your business.
Call our office at (210) 694-0300 or email our office at firstname.lastname@example.org to schedule your free bankruptcy consultation with Attorney Martin Seidler. We represent businesses and individuals throughout south and central Texas.