Experienced Chapter 11 Bankruptcy Lawyers

Chapter 11 is the business reorganization section of the United States Bankruptcy Code. It is used to restructure the debt of Corporations, Partnerships, LLC’s and that of individual business debtors. On June 21, 2022, President Joe Biden signed the Bankruptcy Threshold Adjustment and Technical Corrections Act. This Act increases the eligibility limits for small business debtors or individuals under chapter 11 Subchapter V. Under the two-year extension until June 2024 individuals or small businesses with debts up to $7,500,000.00 can file under Sub-Chapter V and are eligible for a less costly and streamlined method of reorganization under Chapter 11. This limit is set to revert to $2,725,625 if congress does not grant an extension of the law.

The filing of a Chapter 11 petition places the debtor in possession in the position of a fiduciary, with the rights and powers of a Chapter 11 trustee. The debtor can continue to operate the business within the constraints imposed by the Bankruptcy Code and present a plan of reorganization for the court to approve. The operation of the business is supervised by the U.S. trustee who is responsible for monitoring the compliance of the debtor in possession with the reporting requirements.

While the confirmation, and implementation of a plan of reorganization is at the center of a Chapter 11 case, other issues may arise that must be addressed by the debtor in possession. These include use of cash collateral usually secured by a lender and adequate protection payments required to be made to secured creditors. Additionally, the debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval. However, the sale or use outside the ordinary course of its business requires court approval.

The debtor has an exclusive right to file a plan of reorganization during the first 120-day period after the petition is filed. This period may be extended by the court. If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors’ committee or a creditor, may file a plan. This plan may compete with a plan filed by the debtor for approval.

Most plans require that the debtor make plan payments and is bound by the provisions of the plan of reorganization. The confirmed plan creates new contractual rights, replacing or superseding pre-bankruptcy contracts. The court may also allow a plan of liquidation which allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a Chapter 7 liquidation.

A debtor will remain a debtor in possession until the debtor’s plan of reorganization is confirmed, the debtor’s case is dismissed or converted to Chapter 7, or a Chapter 11 trustee is appointed. Once a plan is confirmed, the debtor will be required to make all required payments under that plan.

The attorneys at Urban & Burt, Ltd. have successfully represented debtors in Chapter 11 cases of many varied types including individual reorganizations, manufacturing, trucking, retail sales, professional corporations, real estate and transportation companies. Annual incomes of those businesses range from modest annual incomes to companies with a gross annual income of over $20,000,000. Because each case is different, you should seek individual advice in determining whether a Chapter 11 will be helpful.

Handling Business Bankruptcies

Not all bankruptcy attorneys handle Chapter 11 business bankruptcies. At Urban & Burt, Ltd., our attorneys are among the few suburban law firms to offer Chapter 11 services. We guide business clients through the process, helping them reorganize their debts while they are protected from creditor actions. This type of bankruptcy is also available to individual debtors whose liabilities exceed the strict limits allowed by a Chapter 13 bankruptcy.

Business Bankruptcy Attorneys

Our practice is led by attorney Edmund G. Urban III, a lawyer with over 40 years of experience providing representation to individuals and businesses. Our team builds on his knowledge and experience to assist business clients with Chapter 11 reorganizations.

Chapter 11 Clients

Our Chapter 11 clients include small and medium-sized corporations, partnerships and LLC’s, usually those with annual revenues between $5 million and $20 million. Many clients come to our firm after being referred by previous attorneys whose practice does not include Chapter 11 bankruptcy law. In addition to assisting high net worth individuals with Chapter 11 reorganizations, we have represented businesses in areas such as manufacturing, trucking, retail sales, medicine and law, real estate and transportation.

Handling Complex Issues

Many of our cases involve complex issues, such as protecting officers and directors, ongoing operations, using cash collateral, selling assets during the period of reorganization and reporting to the bankruptcy trustee as required. We have also represented companies who are claimants in Chapter 11 proceedings so that they receive their fair share of payments under the approved plan.

Unlike individuals in Chapter 7 and Chapter 13 bankruptcies, Chapter 11 debtors enjoy a great deal of latitude. They can continue to operate their businesses, extend the time allowed for repaying creditors, or reduce the amount owed to them. Contact the Oak Forest

Chapter 11 bankruptcy attorneys at 708-381-5426 to learn more about our Illinois law firm and how we help file Chapter 11 bankruptcy for our business clients. As a full-service law firm, we are also able to help clients with legal matters that may not have a bankruptcy component.

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