Chapter 11 Bankruptcy

Chapter 11 is like Chapter 13 – on steroids. Most, but not all, Chapter 11 petitions are filed by businesses looking to restructure their debts so they can continue operations. Unlike Chapters 7 and 13, however, a bankruptcy trustee is not immediately appointed upon the filing of a Chapter 11 petition. Instead, the debtor is allowed to continue to manage the assets of the bankruptcy estate as a “debtor-in-possession,” with most of the same powers as a bankruptcy trustee, unless and until the bankruptcy court decides that the debtor-in-possession needs to be replaced by a trustee. As Utah business bankruptcy attorneys in Salt Lake City, we can help businesses and individual debtors with significant assets and/or irregular earnings reorganize their affairs under Chapter 11.

Like Chapter 13, Chapter 11 also requires the filing and approval of a plan for reorganization, which is normally proposed in the first instance by the debtor. There are many requirements for a Chapter 11 plan of reorganization to win approval from the bankruptcy court, but the most important is that all creditors in each classification must either vote to approve the proposed plan, or the plan must be “crammed down” on them by, among other things, ensuring that they will receive at least as much under the Chapter 11 plan as they would have received in a Chapter 7 liquidation bankruptcy. As with Chapter 13, if no Chapter 11 plan is confirmed, or if the Chapter 11 plan that has been confirmed is later found not to be feasible for some reason, the bankruptcy court can convert the Chapter 11 reorganization case into a Chapter 7 liquidation case. As Utah business bankruptcy lawyers, we also help creditors protect their rights and maximize their recoveries in Chapter 11 cases.

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JD Milliner