Chapter 11 Bankruptcy

Lexington Chapter 11 Bankruptcy Lawyers

Chapter 11 is reorganization as opposed to liquidation. Chapter 11 bankruptcies can help businesses remain operating while the bankruptcy court supervises the companies' reorganization of its contracts and debts. At Bunch & Brock, Attorneys at Law, in Lexington, we have been representing financially struggling companies in complex corporate reorganizations for more than thirty years.

Contact the experienced Bankruptcy attorneys at Bunch & Brock, Attorneys at Law to arrange a consultation to see if Chapter 11 is right for your business.

Maintain Control of Your Business

Federal bankruptcy laws govern how companies and organizations go out of business or recover from crippling debt. Most publicly-held companies will file under Chapter 11 of the Bankruptcy Code rather than Chapter 7, because they can still run their business, control the bankruptcy process and attempt to become profitable again. Chapter 11 provides a process for rehabilitating a company's faltering business. As in other bankruptcies, an automatic stay applies to collection efforts by creditors. Management continues to run the day-to-day business operations, but all significant business decisions must be approved by a bankruptcy court. The Bankruptcy Court can grant complete or partial relief of the companies' debts and contractual obligations. Typical debts and contracts which can be cancelled include secured and unsecured loans, real estate leases, supply and vendor contracts, union contracts, and loan contracts.

Sometimes the company can successfully workout a plan to return to profitability. Sometimes, in the end, it must liquidate its assets. Depending on the size of the company and the complexity of the bankruptcy proceeding, a company can emerge from Chapter 11 bankruptcy in several months or in several years.

In a Chapter 11 reorganization, a company usually keeps doing business and its stock and bonds may continue to trade in securities markets. Since they still trade, the company must continue to file Securities and Exchange Commission reports with information about significant developments. For example, when a company declares bankruptcy, or has other significant corporate changes, they must report it within fifteen days on the Sac's Form 8-K.

The Limitations of Chapter 11

The Chapter 11 route is also available to individuals, but because this kind of filing can be expensive and time-consuming, it's typically used only by those who have debts that exceed the Chapter 13 bankruptcy limits, or who own substantial non-exempt assets, such as real estate.

In addition to representing businesses and companies who are seeking debt relief through Chapter 11, we also have extensive experience representing unsecured and secured creditors' committees, representing parties in discharge litigation and other adversary proceedings.