Sometimes Chapter 11 Can Help a Small Business Survive
Many people think of Chapter 11 as a tool for major corporations that need to restructure billions in debt while renegotiating labor contracts and bond commitments. Fewer people recognize that Chapter 11 is also available for small businesses and in rare cases, even consumers.
If you need advice about the role Chapter 11 can play in saving your business, contact a knowledgeable bankruptcy lawyer at the offices of Steven E. Mirsky, LLC, in Rockville, Frederick or Laurel. We’ve helped consumers and small businesses with bankruptcy since 1977, and our experience and detailed understanding of the Bankruptcy Code can make a positive difference for you and your company.
Call 866-654-2003 to learn about Chapter 11 bankruptcy
We do not recommend Chapter 11 for our business clients very often. It’s a cumbersome process that will expose your entire company to the view of your creditors, and it’s hard to pull a foundering business through Chapter 11 in one piece. Most proposed plans of reorganization fail or never get off the ground. Liquidation under Chapter 7 is a more realistic option for most companies in financial trouble.
There are situations, however, in which Chapter 11 makes good sense for a basically sound company of any size facing a financial crisis. The fewer the number of creditors you need to deal with, the more promising Chapter 11 relief might be.
Here are some situations that Chapter 11 can help resolve:
- Tax problems, including payroll tax or sales tax delinquencies
- Credit problems related to the insolvency of a partner or equity principal
- Landlord-tenant problems
- Problems with a major secured lender
- Liability related to a lawsuit
Assuming that your business is otherwise sound, Chapter 11′s automatic stay Link to Immediate Benefits Practice Area can relieve the pressure presented by any of these situations and give you a chance to stay in operation while working out arrangements with your creditors. Our attorneys can review your situation and let you know whether Chapter 11 is right for you.
