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Businesses in financial trouble can seek protection from creditors in Chapter 11 while a plan of reorganization is worked out. For small business a Chapter 11 bankruptcy filing allows the business to reorganize its debts and make arrangements to pay all or a portion of the debts while obtaining protection from creditors.
A small business Chapter 11 also may be used to sell the business as a going concern. In many cases a small business can continue in operation and jobs can be saved by selling the business as a going concern to a friendly group of investors. There is also a new Small Business Chapter 11 for businesses with debt of less than $2,725,625.00. The new provisions are designed to speed up the process and reduce the costs. Our office has filed numerous Chapter 11 cases in Broward County and throughout South Florida and can help you with this process.
If your business has suffered a temporary setback a Chapter 11 may give you the time you need to get caught up on bills. It also provides a forum to negotiate with all creditors in a setting favorable to the business. Call us if you would like an assessment of whether a Chapter 11 can help your business. We work hard for our clients to find the right solution for any business situation. For more on Chapter 11 see our Chapter 11 page.
Chapter 11 can also be used to liquidate a small business in an orderly fashion. The owners and officers can continue to operate the business while its assets are sold in an orderly fashion.
A Chapter 7 liquidation proceeding is also available to partnerships and corporations. If the business is no longer operating it is often more efficient and less stressful to let a Chapter 7 trustee liquidate the business and deal with its creditors. For more on Chapter 7 see our Chapter 7 page.
Our firm has represented creditors and employees in many local and national bankruptcy cases, including the K-Mart, Winn-Dixie, Linen Supermarkets and Bertram Yachts bankruptcies. Call us if you need assistance with the J.C. Penney or Hertz Bankruptcies or any pending case. Most creditor matters can be handled remotely.
Some Chapter 11 Success Stories
We have filed Chapter 11 bankruptcies for many small businesses over the past 30 years of practice in bankruptcy law. Here are a few examples:
- Small business Chapter 11 to stop an IRS levy and allow the client to negotiate a payment plan with the IRS. We were able to file and remove all levies within 48 hours and save over 100 jobs.
- Small business Chapter 11 for a toy distributor which allowed the client to sell the business as a going concern and shed most of the company debt.
- A Chapter 11 for an LLC which owned two apartment complexes to reduce the secured debt to the appraised value of the real property.
- Small business Chapter 11 for a mortgage company to stop a foreclosure proceeding by its warehouse line lender.
Call us to see if there might be a strategy to help you or your business.
This article is not intended as a substitute for competent legal or accounting representation, but merely as a guide to help you decide whether you need the services of a licensed attorney or CPA.
David W. Langley is licensed to practice only in the State of Florida and handles bankruptcy cases in South Florida, Miami, Hollywood, Fort Lauderdale, Plantation, Pembroke Pines, Pompano,Coral Springs, Deerfield, Boca Raton, Delray and West Palm Beach.