Ohio Chapter 11 Bankruptcy Attorneys

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is another debt relief option for small businesses. In general, this is a less attractive option because it is very time-consuming, expensive, complex, and risky. Because of these reasons, chapter 7 bankruptcy and chapter 13 bankruptcy are more popular debt relief options for small businesses.

Although most small businesses shy away from filing chapter 11 bankruptcy, it is the only bankruptcy filing option that allows a business to restructure and continue operations if owned by a partnership, limited liability company (LLC), or a corporation. Filing chapter 11 bankruptcy may be a viable option for businesses that are in too deep of debt to meet the eligibility requirements for chapter 13 bankruptcy.

At Graham & Associates Law Offices, LLC, we help businesses explore their debt relief options, which may include chapter 11 bankruptcy. If you’re interested in speaking with an experienced Ohio chapter 11 bankruptcy lawyer to explore your options, please contact us today.

Who Should File Chapter 11 Bankruptcy?

Individuals or businesses that are wealthy and have a high about of debt should file under chapter 11. This is because there are debt and income limits for qualifying for chapter 7 bankruptcy and chapter 13 bankruptcy. Additionally, businesses that are interested in continuing operations should explore chapter 11 bankruptcy.

What Decisions Must the Bankruptcy Court Approve?

Even though the business that files chapter 11 bankruptcy can maintain operations, decision making power is lost to the court.

Any major decision must first be approved by the bankruptcy court such as:

  • Termination or expansion of business operations
  • Entering or terminating a lease agreement

Legal expenses or retainers of legal counsel or other professionals

  • Sale of assets
  • Mortgages or other secured financing agreements

Starting or modifying vendor, union, or licensing contracts or agreements

How Long Does it Take for Chapter 11 Bankruptcy to Complete?

Because of the added complexity, size of debtors, operations, and other considerations, chapter 11 bankruptcy cases can span multiple years. Before filing, there is usually months to years of background preparations that take place. However, once the actual motion has been filed, the cases move very quickly. On average, a chapter 11 bankruptcy case takes six months to two years to complete. Chapter 11 bankruptcy cases have no limit on the duration of them.

Approval of a Chapter 11 Filing

Better known as “confirmation”, there are numerous requirements that must be met for a bankruptcy court to file chapter 11 bankruptcy including:

Good Faith – As implied, the court must believe that the plan was filed in good faith and not by forbidden means.

Feasibility – Simply put, the court must find that the plan is likely to succeed in getting the business back on its feet.

Best Interests of Creditors – Depending on the case, the debtor is required to pay its creditors all of the money they owe to them. However, most debtors are financially unable to do this and can meet this requirement by paying them a fraction of what they owe.

Fair and Equitable – Secured creditors must be paid over time the value of their collateral. Secured creditors are those that have a mortgage against property or lien on inventory or equipment. This requirement only applies is the affected creditors do not support and vote against the proposed chapter 11 plan.

What is the Success Rate of Chapter 11 Bankruptcy Filings?

Based on recent reports and studies, approximately 10 to 15% of Chapter 11 filings result in successful reorganizations of indebted businesses. The majority of cases are either dismissed or converted to chapter 7 bankruptcy filings.

Contact Our Canton, Akron and Youngstown Bankruptcy Lawyers Today

If you think that chapter 11 bankruptcy is right for you and your business or would like to discuss other debt discharge options, contact one of Graham & Associates Law Offices, LLC’s experienced bankruptcy attorneys today. We offer a free consultation to discuss your options. Weekend and evening hours are available by appointment.

Learn more about your debt repayment options.