Chapter 11 Reorganizations

Chapter 11 is a complex legal action, and no company would choose it as a first resort. But when survival is on the line, Chapter 11 protection is a powerful tool that can be the difference between revitalization and liquidation. Our attorneys have reorganized more than a thousand companies involving billions of dollars in debt. We know how to achieve maximum value for our clients in a Chapter 11 case. And we also understand that it's never a place our clients want to be. 

 

Filing a Chapter 11 petition triggers an "automatic stay," which stops nearly all lawsuits, collection actions, and payments on debts that existed prior to the filing. This allows the company to stockpile cash, and gives management breathing room to focus on profitability, make operating decisions, and formulate a reorganization plan. In most other respects it's business as usual while operating under Chapter 11 protection.

 

Once approved by the court, the reorganization plan – which can erase debt, change payment terms, and resolve all manner of disputes – becomes the new contract between the company and its creditors. The company then emerges from Chapter 11 as a newly constituted enterprise with clear and manageable obligations.

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