Filing Chapter 11 and Business Bankruptcy

Long Beach Chapter 11 Law Firm

Bankruptcy filings under Chapter 11 are prominent in the news these days, as two of the nation’s largest automobile companies – Chrysler and General Motors – have sought the protection of the bankruptcy court. Both companies filed under Chapter 11, which contemplates a reorganization so that a restructured business can emerge from bankruptcy and continue to operate. If you have a business in dire financial straits, or if you are a creditor of a business that has filed Chapter 11, contact the Claveran Law Firm, Long Beach, California bankruptcy attorneys. With 20 years experience representing individuals and business, we can help you weigh your options filing bankruptcy under Chapter 11.

What is Chapter 11?

Under Chapter 11, individuals engaged in business, partnerships, corporations, and other business entities may file for bankruptcy protection and, working within the Bankruptcy Code and with creditors and debtors, propose a plan for reorganizing that will let the business entity continue in business. The theory behind a Chapter 11 bankruptcy is that the business can become a viable entity again with some help from creditors and debtors.

The business files a petition for bankruptcy, which is then served to all of its creditors and debtors. All of the business’s assets and liabilities are scheduled and attached to the petition, and also shared with creditors and debtors. The business (now, the “debtor”) puts together a plan of reorganization, and proffers it to all interested parties. Generally the plan reduces the amount of debt the debtor will have to pay back; creditors will receive a percentage of what they are owed. Essentially all aspects of the debtor’s business are examined, and at the end, if creditors agree, the business will emerge from bankruptcy with the “fresh start” that was the goal from the beginning.

If you are contemplating filing for bankruptcy under Chapter 11, or if you are owed money by a debtor in Chapter 11, it is critical that you seek the advice of an experienced, knowledgeable bankruptcy attorney.

Contact the Claveran Law Firm in Long Beach, California at 888.838.0431, or submit an email via our quick contact web form.