Business bankruptcy options can help Tennessean businesses recover from the struggles they have been facing. Chapter 11 business bankruptcy options are designed to help struggling businesses get back on their feet. In doing so, Chapter 11 bankruptcy provides the opportunity for the filing company to restructure its debts, while it continues to operate with the goal of returning to profitability once again.
In addition, the Chapter 11 bankruptcy process allows the filing company to reduce costs and seek sources of revenue in an effort to return to profitability. Another benefit of the process is that the temporary stay goes into effect once the filing party filed for bankruptcy. This prevents creditor collection actions during the process, which can allow the struggling company to focus on the process, reducing debt and being successful once more.
As part of the Chapter 11 bankruptcy process, the filing company drafts a debt reorganization plan and may renegotiate contracts and leases to help reduce debt obligations. Once the reorganization plan is approved, debts that existed prior to the reorganization plan are not included in it will be discharged. The company must then abide by the reorganization plan. Provided the plan is reasonable, legal and developed in good faith, it is likely to be approved by the court.
Developing a repayment plan that is approved by the court through the Chapter 11 bankruptcy process can help struggling businesses get back on their feet. There are different business and commercial bankruptcy options to consider with different goals for the business in mind, so it is helpful to understand each of the different options and how they work when considering bankruptcy relief.
Source: Bankruptcy.FindLaw.com, “Chapter 11 Bankruptcy,” accessed on Jan. 31, 2017