Can I keep my business open during a liquidating plan in a Chapter 11 bankruptcy?

Yes, it is possible to keep your business open during a liquidating plan in a Chapter 11 bankruptcy in Arizona. Generally, there are three options when filing for bankruptcy: reorganization, liquidation, and conversion. Of these three, a liquidation plan is the most drastic. It involves the sale of all of the company’s assets to cover the debts of the company. When liquidating assets in a Chapter 11 bankruptcy in Arizona, the debtor must first obtain approval from the bankruptcy court. Specifically, they must submit a disclosure statement that outlines the terms of the liquidation plan. If the court approves the plan, the debtor can then proceed with the liquidation of assets. The liquidation is intended to help the debtor pay off their financial obligations as quickly as possible. However, despite the liquidation, the debtor can stipulate in their disclosure statement that the business will stay open and operational. This is known as an “operational liquidation”. This is generally done if the business is expected to make enough revenue from operations to pay its debts and keep the business open. Ultimately, it is possible to keep your business open during a liquidating plan in a Chapter 11 bankruptcy in Arizona, depending on the specifics of the disclosure statement filed with the court.

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