Under the United States Bankruptcy Code, Chapter 11 is a bankruptcy option available to businesses. A business of nearly any size can file for Chapter 11 and continue to operate. Chapter 11 is the least common bankruptcy filing because it is often the most expensive and risky option.
When filing Chapter 11, a company discloses its assets and also creates a list of all debts from with that the company wants protection. Creditors get the opportunity to question the company about debts and assets, which can be a lengthy and complex process.
Though complicated and risky, companies may choose Chapter 11 because long-term revenues would be of greater value than assets. Thus, creditors would receive more money if they simply allow the business to continue to operate, which is to the advantage of both the creditor and the debtor. As with other bankruptcy Chapters, a payment plan is agreed upon between the company and the creditors.
Bankruptcy Law has recently changed greatly, but a qualified bankruptcy attorney can help you navigate through all of the information and choose the best option for you. Call Swindell Law Firm in Amarillo, TX now to begin the process.