Tag Archives: bankruptcy
When Is a Structured Dismissal Appropriate in Chapter 11?
A structured dismissal of a Chapter 11 bankruptcy case is a court order that includes special provisions. Unlike a standard dismissal, which ends the case unconditionally, a structured dismissal resolves certain issues through agreements among the debtor, creditors and other stakeholders. It may call for distributing the debtor’s remaining funds in a manner considered fair […]
U.S. Corporate Bankruptcies Reached 14-year High in 2024
The year 2024 showed a marked increase in companies filing for bankruptcy protection, signaling a deepening crisis within the corporate sector. The first quarter of the year was particularly notable, with a total of 190 U.S. companies filing for Chapter 11 from January through March. That was higher than any first quarter since 2010, when […]
When Might a Court Remove a Subchapter V Debtor-in-Possession?
In a small business reorganization under Subchapter V of the U.S. Bankruptcy Code, the business owner is typically allowed to continue operating as a debtor-in-possession (DIP). This arrangement permits the owner to maintain control over the business under the auspices of the court-appointed trustee in order to facilitate the transition to financial solvency. However, there […]
Using Motions to Compel Turnover of Bankruptcy Estate Property
When a bankruptcy petition is filed, the debtor’s assets generally become a part of the bankruptcy estate. This means they are protected from creditors and to some extent may be kept by the debtor under recognized federal or state exemptions. However, some assets belonging to the estate may be in the possession of creditors or […]
What Are the Basic Steps in a Chapter 11 Bankruptcy?
Chapter 11 is a legal remedy designed to help financially troubled businesses remain operational and protected from creditors while they work to restructure their debts under a court-approved reorganization plan. The goal is for creditors to be partially repaid and for the debtor company to emerge solvent and financially stable at the end of the […]
How a Subchapter V Repayment Plan Can Meet the “Best Efforts” Test
Subchapter V of the Bankruptcy Code is a debt relief remedy for small business owners in financial distress. It was enacted as a cure for the difficult challenges faced by small businesses attempting to restructure using the traditional Chapter 11 process. A reorganization plan in Chapter 11 often precludes small business owners from retaining equity, […]
Is Chapter 13 a Better Option for a Sole Proprietor Than Chapter 11?
For a small business owner facing financial distress, choosing the right bankruptcy option is critical to protecting their assets while achieving debt relief. While Chapter 11 bankruptcy is an option, it is typically a complex and costly process that may not be the best fit for sole proprietors. Chapter 13 bankruptcy, by contrast, offers a […]
When Might a Bankruptcy Court Appoint a Chapter 11 Trustee?
In most Chapter 11 bankruptcy cases, the company or individual filing for protection acts as a debtor-in-possession (DIP). The debtor retains control of the business and continues its daily operations under the oversight of the bankruptcy court. The debtor-in-possession has the fiduciary responsibility to manage the business in a way that maximizes the value of […]
How Clawbacks Can Affect the Progress of a Chapter 11
Clawbacks are mechanisms that allow a Chapter 11 bankruptcy trustee or debtor-in-possession (DIP) to recover certain payments or asset transfers made by the debtor prior to or shortly after filing for bankruptcy. These provisions aim to ensure equitable treatment of creditors and prevent debtors from unfairly preferring certain creditors or transferring assets to hinder creditor […]
What Are the Essential Contents of a Chapter 11 Plan?
Chapter 11 of the United States Bankruptcy Code provides a mechanism for financially distressed businesses to reorganize their debts and operations. A Chapter 11 plan serves as the roadmap for this reorganization, outlining how claims and interests will be treated. It is based on whether the business can be reorganized for a return to solvency […]
