Chapter 11 Bankruptcy Lawyers in Baton Rouge
The Federal Judiciary United States Courts define Chapter 11 Bankruptcy Code as a reorganization of a corporation or partnership, or individuals inside of a business, designed to keep the business alive and pay creditors over time. According to the Administrative Office of the U.S. Courts, the March 2019 annual bankruptcy filings totaled 772,646. This law allows debtors to start anew but the terms are based upon their ability to reorganize under a plan. If debtors are unable to develop a plan, then creditors can submit one.
This can be the most complicated and expensive type of bankruptcy, so it’s recommended that companies in debt review all of their alternatives and analyze the costs and benefits of filing under this chapter of bankruptcy before proceeding. In Baton Rouge Louisiana, an attorney from the law firm of Murray & Murray can provide you with the legal guidance you need and can protect your rights under the law. If your company is unable to meet its debt obligations, contact our law firm today to discuss your case.
How does Chapter 11 work?
Chapter 11 cases usually begin voluntarily with a debtor filing a petition in bankruptcy court. However, creditors can collaborate to file an involuntary petition against a defaulting debtor. Debtors choose to file in the region where their business is domiciled. If your company is in Baton Rouge, for instance, you can file right here in the Louisiana state capital.
Limited liability companies, corporations, partnerships, and individuals with excessive debt or income to file Chapters 7 and 13, can file as a Chapter 11 case. If possible, individuals who are in debt normally elect to file Chapter 7 or 13 because they are less costly. A company filing for Chapter 11 must do so in the best interest of its creditors.
Chapter 11 Bankruptcy Constraints
The Chapter 11 process is not a hasty one, but businesses can continue to operate. Some cases are wrapped up in a matter of months and others take years depending on the intricacies of the business. Your attorney can best provide you with a realistic timeframe for your case.
“Debtor in Possession” and Trustees
Usually, in Chapter 11 filings, a business is allowed to continue operating normally as a “debtor in possession.” However, in a case of mismanagement of the business’ affairs due to fraud, dishonesty, and incompetence, the bankruptcy court may appoint a trustee to run the business.
Bankruptcy Court Control
Even if a business is allowed to continue operating normally while filing for Chapter 11, the business does forfeit some of its rights over to the bankruptcy court including:
- Asset sales like property or real property
- Breaking leasing agreements
- Entering into new leasing agreements
- Financing arrangements that allow the debtor to borrow money after filing the case
- Closing business operations
- Expanding business operations
- Entering into new contractual agreements including licensing, vendor, union, and other contractual agreements and
- Retaining and paying of all legal fees
Chapter 11 Revisions
In 2019 the Small Business Reorganization Act made bankruptcy easier for small businesses. This act allowed companies with less than 2.7 million dollars of debt to have shorter deadlines to complete the bankruptcy process, have more flexibility in developing plans, and allocates private trustees for those businesses.
Frequently Asked Questions
As one of the premier bankruptcy law firms in Baton Rouge Louisiana, our attorneys hear many questions from individuals and businesses who are indebted to creditors. These are some of the most common.
How bad is Chapter 11 bankruptcy?
While no individual or business wants to end up in bankruptcy of any kind, Chapter 11 allows you to restructure your debt under a payment plan. For many Louisiana businesses, this has allowed them a way to recover without having to close their doors.
What’s the difference between bankruptcy and Chapter 11?
There are several different types of bankruptcy, but under this chapter, you’re able to avoid liquidating your assets and to work out a payment plan with your creditors.
Why did I get a Chapter 11 bankruptcy case?
In some rare instances, creditors may bring their case before the court and impose a bankruptcy on their debtor. But even under these circumstances, you and your business have rights under the law.
If this has occurred, contact the law firm of Murray & Murray today.
Chapter 11 Bankruptcy – Baton Rouge
For years, attorneys at the Murray & Murray law firm have been helping clients recover from onerous debt obligations. If your business is in trouble, we can help. Contact us today so we can help you formulate a plan to get out of debt.