As previous posts on this bog have discussed, there are many different ways a Louisville business that finds itself in financial trouble can choose to handle mounting debt in the face of sluggish revenue.
For instance, under some circumstances, a business owner can lump his or her business debts in to a personal Chapter 13 bankruptcy, which can give the owner valuable time to get the business reorganized and turned around while he or she slowly pays off business debt.
In most situations, however, short of closing up shop and liquidating the business, a business is left with two options. The first is a Chapter 11 bankruptcy, and the other is simply working things out with business creditors on an individual basis.
By way of review, a Chapter 11 is a type of bankruptcy in which a business reorganizes its affairs under court supervision. Some debts gets repaid, others get partially repaid, and some may be wiped out in connection with the bankruptcy.
In exchange, though, a business and its employees can be profoundly affected by the court’s orders in a bankruptcy, and the affects can include having to close stores or sell off part of the business. Sometimes, it may not be the best option.
Our law office has represented businesses of all sorts file for Chapter 11 bankruptcy and get through the ensuing reorganization process. However, one of the most valuable services we provide at the outset is helping businesses decide when they should file for Chapter 11, or, for that matter, if they should file for Chapter 11 at all.
If it turns out after investigating all the facts and applicable law that bankruptcy is not the best option for a business, we can help that business try to resolve their debts with creditors outside of the bankruptcy process.