Chapter 11 Reorganization For Troubled Businesses

If your business is underwater and the sharks are circling, Chapter 11 bankruptcy provides a reprieve from creditors. This buys time to either negotiate with creditors to salvage the business or liquidate the entity in an orderly and advantageous way.

ChildersLaw counsels troubled businesses and nonprofits that have reached that fork in the road. We have shepherded clients through successful reorganizations to re-emerge in better fiscal shape. We have helped other business owners engineer their exit strategy through Chapter 7 with minimal personal exposure.

How Does Chapter 11 Work? Will Chapter 11 Work?

A Chapter 11 bankruptcy is similar to an individual Chapter 13 bankruptcy. Creditors are held at bay, but debts are not discharged. If the business entity will continue, you must present a repayment plan to be approved by a committee of creditors. One key difference is that you serve as your own trustee — no one watching over your shoulder or searching for avoidance actions or nondischargeability.

Typically debts are settled for some fraction, and creditors write off the rest. Jeff Childers is an experienced bankruptcy litigator who can help find that realistic balancing point at which creditors are likely to agree. If the plan is too greedy, the creditors will balk and take their chances in court. If the repayment is too generous, you will struggle to ever reach solvency or profitability.

Is your business beyond the point of return or can you get back in the black under reorganization? The first step is to talk with an experienced bankruptcy attorney who can provide sophisticated analysis and solutions.

Our Successful Applications Of Chapter 11

  • We completed a Chapter 11 for the local YMCA, the only Y chapter to emerge successfully from reorganization. After acquiring real estate for a planned expansion, the economy tanked and the North Central Florida YMCA faced budget shortfalls and foreclosure suits. Under our Chapter 11 plan, the Y remained open to the community and today is financially stronger than ever.
  • Three partners in a mini storage venture had obtained a loan from a local bank. The note was sold, and when the loan matured the new bank would not renew or restructure. With the market downturn came default. Placing the business in Chapter 11 enabled our clients to liquidate on their own timetable to obtain the highest and best price for the assets.
  • We filed Chapter 11 for two individuals facing foreclosure on apartment buildings they owned as guarantors. The plan is to sell one of the properties and keep the other under a restructured loan. Without the debt baggage, the new property will be cash-flowing and tenants can stay put.

Chapter 11 is also applicable to high net worth individuals who are not candidates for Chapter 13 (debt limits) or Chapter 7 (asset limits).

Making The Most Of The Opportunity

At ChildersLaw, we approach bankruptcy as a strategic move rather than a band-aid. We write workable plans for small to midsize companies as well as private schools and nonprofit organizations.

Our niche is complex cases that other bankruptcy lawyers can't or won't handle. Located in Gainesville, we serve Alachua County and northern Florida. Call 352-335-0400 or contact us by email to arrange a consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.