The reasons people and companies file for Chapter 11 protection are infinite. Likewise, the solutions you may propose in a plan of reorganization are only limited by your imagination and by the law. If you have an attorney with the necessary experience and know-how, you can succeed in devising a plan that accomplishes your goals within the ample parameters allowed by the law.
Companies seek to reorganize because their continued viability is threatened by, among other things:
- Their failure to establish the accounting and controls necessary from the beginning of their enterprise and now obligations to taxing authorities, workers’ compensation requirements and other such issues seem overwhelming;
- Their overly ambitious growth as either economic conditions or the demand for their goods or services dried up or was less than anticipated;
- Unmanageable amounts of research and development costs continue to mount before they can exploit their achievements;
- Unexpected scarcity of credit; or,
- Demands from tenants of rental units for lower rent even though the owners’ mortgage payment obligations remain the same.
Discharging the majority of the business’ debt, adjusting the terms of secured debt, paying unsecured debt over time, or getting more time to achieve the milestones necessary to permit the business to become viable, or a combination of all the foregoing, may allow your enterprise to become profitable again or for the first time.
Contact us to set up a consultation with our experts.