When companies fall on hard financial times, many business owners may feel out of hope. Ideas of closing the company and letting employees go may swarm their minds along with feelings of stress and anxiety. However, some Louisiana businesses may be able to utilize Chapter 11 bankruptcy to handle outstanding debt and attempt to keep operations running.
If a company determines that Chapter 11 is the best course of action, it must follow the necessary court proceedings. This type of bankruptcy involves the restructuring of business debts and is the most complex type of bankruptcy. Typically, companies are able to remain operational while they work to get their financial affairs back on track with this debt relief option. However, some of the business-related decisions will need court approval during this time, such as selling assets or starting or ending rental agreements.
When it comes to restructuring the debt, the company filing for Chapter 11 must first propose a reorganization plan. The court will review the plan and, after hearing from creditors, determine whether it is a viable proposal for reaching the desired end results. If the company does not create and present a workable proposal, creditors may have a chance to present a proposed plan instead.
Going through any type of bankruptcy can be a long and difficult journey. Still, Louisiana business owners who are struggling with company finances may want to consider gaining information on Chapter 11. Determining whether this option could prove useful to them may allow them to start a journey toward financial stability. Working with experienced bankruptcy attorneys is a wise step to take.