Reorganizing Under Chapter 11 in Newton, Warren and Sussex Counties
Working with your creditors to keep your business open
The bankruptcy process is all about second chances. The theory behind Chapter 11 bankruptcy is that it is better for everyone to give struggling businesses the opportunity to reform and become profitable than it is to simply liquidate their assets and shut them down. That is why companies going through this process are allowed to hold onto their assets, stay open and continue doing business while making the internal and external changes necessary to regain their footing. However, Chapter 11 is far from simple and requires you to work closely with your creditors. At Hollander, Strelzik, Pasculli, Hinkes, Wojcik, Gacquin, Vandenberg & Hontz, L.L.C., our attorneys put their experience and negotiating skills to work for you to get your company through Chapter 11 as quickly and beneficially as possible.
How Chapter 11 works
Chapter 11 is available to businesses and individuals, although it is most commonly associated with companies. Once you file for bankruptcy, you normally have 120 days in which to submit a reorganization plan to the court. This plan is subject to approval by the creditors whose contractual rights are adversely altered by the plan. A reorganization plan can use several methods to improve the petitioner’s financial position:
- Reorganization of the company
- Sale of divisions or holdings
- The scaling back of operations
- Sale of assets
- Renegotiation of contracts
- Settlement of obligations
If you cannot get a plan approved within the time limit, your creditors may file their own competing plans for approval. If enough of your creditors agree to your plan, however, it can go before the court for confirmation, at which point individual creditors can have their objections to the plan heard. Upon approval of the plan, your prior debts are discharged, and you become bound by the provisions of the confirmed plan.
Advantages of Chapter 11
The primary advantage of Chapter 11 and the reason it is favored by businesses is that it allows the petitioner to keep assets and stay in business. Moreover, if your creditors are amenable, Chapter 11 can be a fairly quick process. While not common, Chapter 11 can provide an option for high-income individuals whose incomes are too high to qualify for Chapter 7, but whose debts are too great to qualify for Chapter 13. Our team can review your situation to determine if Chapter 11 is your best option and then work proactively with your creditors to make the process go as quickly as is practical.
Contact a Sussex County firm that can help reform your business
Many struggling businesses throughout America have bounced back after going through the Chapter 11 process. Our attorneys at Hollander, Strelzik, Pasculli, Hinkes, Wojcik, Gacquin, Vandenberg & Hontz, L.L.C. can help your company in Sussex, Passaic, Morris or Warren County take full advantage of the same process. Call our Newton office today at 862-273-3465 or contact us online to schedule a consultation.