Two long-term care operators in Tennessee recently announced that they are voluntarily filing for Chapter 11 bankruptcy protection. The long-term care companies will continue to operate the businesses as debtors in possession during the reorganization bankruptcy. They will retain the same management and staff to continue to run the businesses and provide for residents. In a statement, a representative announced a commitment to continuing to provide high-quality care to residents.
The representative further noted that the decision to file for Chapter 11 reorganization bankruptcy protection was a business decision that will allow obligations to be restructured and will provide the best option for the company to return to profitability and continued success. Chapter 11 bankruptcy is a business bankruptcy option that allows for a business to continue to operate while it restructures to help ensure the future success and continued operation of the company.
The Chapter 11 business bankruptcy process can be complex and involves initially filing a petition for bankruptcy, though the bankruptcy process can sometimes be forced in the context of a Chapter 11 business bankruptcy, followed by the restructuring of the business and renegotiating debts, leases and other obligations that allow the business to reorganize and continue to operate. Sometimes opportunities to raising capital may also be involved.
The Chapter 11 bankruptcy process provides an opportunity for a struggling business to enjoy profitability again through the reorganization process. It is important to understand the process when evaluating the benefits of a business bankruptcy for a company wishing to remain in business and enjoy success once more.
Source: State Gazette, “Highlands of Memphis and Dyersburg announce voluntary Chapter 11 filing,” Nov. 9, 2016