Using Chapter 11 to Sell A Business

It’s a nightmare situation: a small business on the verge of success finds itself hounded by creditors who threaten to liquidate the business, leaving the shareholders with nothing. If your business is facing liquidation, Chapter 11 bankruptcy may provide a way to negotiate an orderly sale.

At the Orantes Law Firm in Los Angeles, our attorneys are dedicated to helping entrepreneurs and shareholders throughout Southern California obtain protection from creditors while they sell their business. We offer a free initial consultation to give you honest answers about your rights and options. 

Selling Businesses in Chapter 11 Bankruptcy

When you file Chapter 11 bankruptcy, your business is protected by the automatic stay, which bars creditors from attempting to collect on a debt. Without the automatic stay, your business can be put in the hands of a receiver, who is motivated to generate fees by liquidating your business. 

When you file Chapter 11 bankruptcy, you remain in charge as the debtor in possession. You can determine who you want to sell your business to and negotiate terms. That person or entity may, in turn, sell the business back to you or hire you to run it. 

Our firm represented a technology company that had spent millions on research and development and was on the verge of bringing its product to the market. By filing Chapter 11 bankruptcy, we were able to sell the firm to a separate entity under favorable terms. As a result, the shareholders did not have to lose their investment in the company.

Because the rules of discharging debts and selling businesses in bankruptcy are complex, it’s important to consult an experienced Chapter 11 lawyer before you file bankruptcy. 

Contact Our Los Angeles Chapter 11 Bankruptcy Attorneys

For more information about using Chapter 11 bankruptcy to sell a business, call (213) 340-0534 or contact us by e-mail to schedule a free initial consultation. Se habla español.