Chapter 11 bankruptcy is a great tool to restructure the finances of a business in financial distress. Chapter 11 allows the owners to continue to operate the business while renegotiating loans that have become too burdensome for the business to service profitably or working with taxing authorities to repay back-taxes of all types.
It is important to know whether you have selected the right attorney to usher your company through the bankruptcy process and to guide the owners through the requirements that are to be met throughout the bankruptcy process. Referrals by former clients or another attorney are a great way to start the vetting process.
Another important component comes in first client-attorney meetings that take place to determine if Chapter 11 is the right decision for your company. The attorney you consult with should provide you a general road map or guidance on how the bankruptcy process works before your company’s case is filed. Has your company’s attorney explained the immediate deadlines that you will need to meet once a case is filed? Have you discussed the need to negotiate with your company’s secured creditors about the use of cash collateral? Did your attorney inform you about your insurance requirements and banking requirements? Have you learned of the risks and benefits of filing a bankruptcy for your company to know you are independently making the right choice for your business? These are all important matters that need to be discussed in advance of a bankruptcy filing even if you have waited until the last minute to consult an attorney about Chapter 11 for your company.
DISCLAIMER: The information contained above is general in nature and provided as reference material only. This information is not specific legal advice about the application of the law to a particular fact scenario, nor does it replace (or purport to replace) any requirement to obtain specific legal advice. This information is not intended to and does not create an attorney client relationship. If you require legal advice, that advice should always be obtained from a qualified legal practitioner in your jurisdiction.