What is the process for reorganizing a business in a Chapter 11 bankruptcy?

In Utah, a business has the option to reorganize itself under Chapter 11 of the Bankruptcy Code. When filing under Chapter 11, a business is given the opportunity to restructure its debts and liabilities to be able to remain operational. This is beneficial for a business that is in financial distress and needs a temporary reprieve to remain in business. The process for reorganizing a business in a Chapter 11 bankruptcy begins with the filing of a Petition for Relief with the Bankruptcy Court. This document outlines the legal business entity and the debts that need to be addressed. Once the Petition is filed, all creditors will be notified of the filing and the business will be required to give a full disclosure of its assets and liabilities as well as its proposed plan of reorganization. This plan must include how the debts will be addressed, as well as any proposed sales or liquidation of assets. The creditors may then vote to approve or reject the plan of reorganization. If approved, the court will then confirm the plan and the business must take the necessary steps to implement the plan. Once confirmed, the business is protected from creditor action and can free up its cash flow to stay in business. If the plan is rejected, the business may be able to propose a modified plan or convert the case to a Chapter 7 liquidation. Once the reorganization plan is confirmed by the court, the business can move forward and begin to rebuild itself financially.

Related FAQs

What is the difference between Chapter 7 and Chapter 11?
What rights does a creditor have in a Chapter 11 bankruptcy?
How do I come up with a repayment plan in a Chapter 11 bankruptcy?
What is a “Chapter 11 trustee”?
How long does a debtor have to confirm a plan in a Chapter 11 bankruptcy?
Can creditors contest a filing for Chapter 11 bankruptcy?
What is “adequate protection” in a Chapter 11 bankruptcy?
How do I find a qualified lawyer for a Chapter 11 bankruptcy case?
Does filing for Chapter 11 bankruptcy protect me from criminal prosecution?
How does the court decide which debts to discharge in a Chapter 11 bankruptcy?

What is the process for reorganizing a business in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts