Chapter 11 Bankruptcy Lawyers in Jacksonville
A Chapter 11 bankruptcy is often referred to as a reorganization plan, employed by corporations, partnerships, and sole proprietorships to manage debt. It allows the business to continue operations while a court-appointed trustee works with the business’s principals to establish a fair, equitable, and feasible way to pay creditors, even while rebuilding the enterprise to function well and profitably into the future.
In Jacksonville, Chapter 11 bankruptcy regulations and procedures do not differ significantly with regulations elsewhere in the U.S. But a Chapter 11 bankruptcy attorney in Jacksonville is more accessible to businesses, banks, and the courts in the northern Florida region and is consequently a better choice when entering this sometimes complex and time-consuming process.
Help with Chapter 11 Bankruptcy
As with any Florida-based businesses, a Chapter 11 bankruptcy filing can help resolve different financial challenges for different businesses. Examples are the following, each of which is considered within a typical Chapter 11 proceeding:
- Relief from stay motions
- Use or sale of property which can include the use of cash collateral
- Assumption or rejection of contracts, leases
- IRS/tax problems
- Divorce of a principal/owner
- Judgments from lawsuits
- Property foreclosure
The reorganization plan may require addressing multiple issues, separately, through evidentiary hearings. The outcome of each hearing can affect the outcomes in others.
Some requirements to meet
The process places several requirements on the filer, all of which are geared toward returning the business to profitability. First, the case is assigned to one or several committees that will advise and review the reorganization plan. The plan is arranged by the U.S. Trustee Branch of the Justice Department, which necessarily serves interests of both company owners (principals and/or shareholders) and creditors. Creditors, owners and lenders (note holders) then approve the plan before it passes to the bankruptcy judge for approval.
Once entered, Chapter 11 bankruptcy affords the business—officially referred to as the “debtor in possession”—distinct privileges:
- The debtor in possession is able to acquire financing on favorable terms because new lenders are given priority on earnings.
- Debtor in possession may reject or cancel contracts.
- An automatic stay is placed to protect the debtor in possession against other litigation. This litigation can be resolved in bankruptcy court.
Note that creditors have the opportunity to be heard in court.
As responsible, bankruptcy attorneys, we advise potential clients that such a plan takes time and effort. Sometimes, timing or available resources direct the company to instead enter a third-party debt restructuring as an alternative to Chapter 11. This less formal process still requires cooperation with creditors and lenders but is often appropriate for businesses with simpler financial scenarios.
Call us at 904.391.0030 or contact us online to schedule your free initial consultation.