Everyone Else Is Doing a Remake – Chapter 11
We have covered the business bankruptcy process in the past. With the economy showing signs of weakness, it might be a good idea to revisit this topic. This week, we will start with Chapter 11. As I wrote about a year ago, this is the Six Million Dollar Man option (“We can rebuild him. We have the technology. We can make him better, than he was. Better, stronger, faster”). Okay, maybe the two aren’t totally analogous, but the goal is very much the same. The company is hoping to emerge better and stronger.
A company that files a Chapter 11 does so to restructure their debts and make a fresh start. The business will first propose a reorganization plan to the US Bankruptcy Court. If the plan is accepted, the business continues to operate with the goal of emerging as a viable and functional entity.
The bottom line is that the company and its management team in a Chapter 11 need to make some hard choices if it is going to come out of this process successfully. If it does not, then the other alternative is to close its doors and liquidate (i.e., a Chapter 7 Bankruptcy), which we will get into next week. Everyone else seems to be doing remakes these days, why can’t a business do it.
Here are a few other items of interest:
- Webinar | Securing Your Small Business: Privacy and Data Security (nfib.com) (08/07 @ 12pm EST)
- Picture It: The Path to Pay Transparency | Stambaugh Ness
- Heading Towards the Cliff: Tax Update & Planning in Dynamic Times Part 2 | Stambaugh Ness (8/13 @ 2pm)
- Compensation Philosophy & Strategy: The Art and the Science | Stambaugh Ness (08/20 @ 2pm EST)
As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.
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