Georgia Chapter 11 Bankruptcy
Unlike Chapter 7 bankruptcy, in which you liquidate your business assets, or Chapter 13 bankruptcy, where you establish a plan to pay back your debt, you may decide to restructure your business and its debts by meeting your obligations from future earnings. For Atlanta businesses, this bankruptcy method is Chapter 11, also known as reorganization. When you decide to reorganize your business under Chapter 11 bankruptcy, you must protect the interests of your creditors, stockholders, and bondholders when developing the reorganization plan.
Considering your options
The first step when thinking about Chapter 11 as an Atlanta business is to consider if this method is right for you. Consider the following issues:
- Reorganization can be expensive.
- The time and effort of bankruptcy proceedings can be overwhelming for the management of a company facing financial trouble.
- Some companies are really reflections of the skills and knowledge of their owners. It may not make sense to restructure these businesses. In fact, it may be more cost-effective for the owner to liquidate under Chapter 7 and start a new business later.
Berry & Associates knows how to analyze your personal circumstances, including any businesses that you own. We can help identify when a Chapter 11 filing will save your Atlanta business and allow it to head toward a successful future.
The Chapter 11 process
Once you have decided to file for Chapter 11 in Atlanta, or anywhere in Georgia, you must prepare and file a plan for dealing with your debt to emerge from bankruptcy. Your plan must be approved by your creditors, and the timeframe for the restructuring process could be just a few months to several years. It all depends on the size of your company and the overall complexity of your situation. Requirements for this plan include:
- Classification of all claims and how each class of claims will be treated under the plan.
- Approval of the plan by your creditors, particularly if the plan changes existing contractual obligations.
- Once the case is heard in court, determination is made on how the restructuring will be implemented, including:
- Approval or modification of your plan.
- Whether a U.S. Trustee will be assigned to oversee the business’ operations and ensure that the restructuring plan is being followed.
- Whether a creditors committee is appointed by the U.S. Trustee, made up of as many as 20 of the largest unsecured creditors to negotiate the plan and provide oversight over your company’s operations.