What Is Chapter 11 Bankruptcy in Alabama?
A Chapter 11 bankruptcy is the most complex type of bankruptcy. It is mainly reserved for businesses seeking to reorganize their business affairs, debts, and assets. Since pursuing a Chapter 11 means undergoing a complex process, it is imperative that an expert chapter 11 bankruptcy attorney in Birmingham, AL be consulted. After careful analysis, your bankruptcy attorney in Jefferson County will assess whether a Chapter 11 is suitable. If a Chapter 11 is expedient, your business will restructure and continue moving forward under the new plan approved by the court.
What Is Chapter 11 of the Bankruptcy Code? Compared to Chapters 7 and 13, Chapter 11 is the most complex type of bankruptcy. Though individuals can file Chapter 11 of the Bankruptcy Code, it is mainly reserved for businesses (corporations, sole proprietorships, partnerships, etc.) seeking to readjust their business affairs, debts, and assets with the goal of becoming profitable once more. No business plans to become insolvent, but it’s all too easy to accrue debts and liabilities in this competitive corporate market. Depending on your business goals, Chapter 11 could be the best option for you.
- What Every Business Owner Should Know About Chapter 11 Bankruptcy Filings
- Who Can File A Chapter 11 Bankruptcy?
- When Does The Debtor Receive A Discharge In A Chapter 11 Case?
- What Type Of Long Term Relief May A Debtor Obtain Under Chapter 11 Bankruptcy?
To initiate the process of declaring bankruptcy in a Chapter 11 case, the debtor files a plan of reorganization to keep the business operating; this plan must be accepted by creditors, as well as any bond and stockholders, and then confirmed by the bankruptcy court. Under the plan, the debtor must agree to pay their creditors over time, and in exchange, the debtor is afforded a number of advantages not open to those who file Chapter 7:
- The debtor is allowed to remain in control of all possessions and assets.
- The current management continues to oversee daily operations, though all big business decisions must also be approved by the court.
- The company’s stocks and bonds can continue to be traded in the market, under review by the U.S. Securities and Exchange Commission (SEC).
In addition to the plan of reorganization, the debtor must also file a disclosure statement with the court, outlining their assets, liabilities, and general business affairs for the creditors interested in their case.
The Perils and Pitfalls of Filing Pro SeIf your business is interested in pursuing a Chapter 11, it’s imperative to consult a chapter 11 bankruptcy attorney in Birmingham, AL to guide you through the complex process. Though a business or an individual can legally file for bankruptcy without an attorney (a process called filing pro se), it’s always recommended to seek legal advice when handling something that could have such long-standing and wide-ranging consequences on your financial future and individual rights, not to mention the repercussions on the value of stocks for your shareholders if your business is publicly traded. You or your company could easily make a mistake in one of the many petitions or statements you’re required to file without the expertise of a Chapter 11 Bankruptcy Attorney in Birmingham, Alabama. Even one mistake could result in your case being dismissed and your business losing its bankruptcy protection.
Let an Experienced Legal Counsel Be Your Bankruptcy Guide
Chapter 11 Bankruptcy Attorney John W. Clark IV will first use his extensive experience in business, law, and finance to assess whether a Chapter 11 is the right answer for your company. If he deems a Chapter 11 an expedient option to discharge your debts, he will be there every step of the way: when your business files your plan of reorganization and disclosure statement; when your business restructures itself; and when your business moves forward under the new plan approved by the court. Bankruptcy can be stressful and emotional process; you shouldn’t have to worry about liquidation or whether you’ll be able to keep your home or your car on top of the complications of filing. Attorney John W. Clark IV is here to simplify the legal process for you and your business, allowing you the time and space to focus on rebuilding your assets and the things that matter to you. He takes the time to learn the ins and outs of your company, ensuring he offers the best advice for your business’s needs and goals.
At Clark Law Firm, we are dedicated to assisting and guiding businesses with customized, exceptional representation. Attorney John W. Clark IV has represented hundreds of small- and medium-sized companies as they navigate the complexities of bankruptcy law to rehabilitate their struggling businesses. He is a seasoned litigator with a bachelor’s degree in business administration and a master’s in banking and finance, making him the ideal attorney to lead your business through a reorganization of debts. Protect your business’s future with the incomparable expertise and efficient counsel that can only be found at Clark Law Firm, right here in Birmingham, Alabama.
The Debtor In Possession
When a petition is filed for a chapter 11 bankruptcy, the debtor is known as a debtor in possession. Since chapter 11s are mostly used by businesses, such as corporations, sole proprietorships, and partnerships, the law deems it necessary to place someone in a fiduciary role to carry out certain duties laid out in the Bankruptcy Code. The reason, business entities typically exist separate and apart from its owners and/or stockholders. As such, the debtor in possession acts as the fiduciary on behalf of the entity. To gain a better understanding of a debtor in possession’s role, contact an experienced chapter 11 bankruptcy attorney in Birmingham, AL.
The debtor in possession is responsible for examining and objecting claims, accounting for property, filing reports, and filing tax returns. A debtor in possession can also hire attorneys, accountants, and other professionals to assist in the bankruptcy. It is important to note, however, that the debtor in possession must seek the court’s approval before employing such professionals. For more information about a debtor in possession’s responsibilities and actions, a knowledgeable chapter 11 bankruptcy attorney can provide in-depth details and insight.
Chapter 11 Bankruptcy Administrators
Unlike most states, chapter 11 bankruptcies in Alabama are overseen by bankruptcy administrators and not US trustees. A bankruptcy administrator monitors chapter 11 cases and actions applicable to chapter 11s, and function similarly to US trustees. They monitor transactions, the conduct of the parties in bankruptcy, maintain a list of approved credit counseling agencies, approve debtor education agencies, and issue schedules of administrative expenses. To learn more about bankruptcy administrators and their role in chapter 11s, a chapter 11 bankruptcy attorney in Birmingham, AL can help specify their duties and involvement.
It is also worth noting that the debtor in possession pays a quarterly fee to the Bankruptcy Administrator’s office based on the amount disbursed by the debtor during each quarter. For a quarterly fee schedule, a seasoned chapter 11 bankruptcy attorney can provide applicable information.
If you or your business is considering filing for bankruptcy, schedule a consultation with Clark Law Firm today.
If you are interested in pursuing a Chapter 11 bankruptcy, at Clark Law Firm, we are dedicated to assisting and guiding businesses with exceptional representation.