What is a Chapter 11 bankruptcy?
Chapter 11 is really designed to help businesses or high net worth individuals restructure their debts and repay a large portion of them. If a business entity wishes to stay in business but needs bankruptcy relief, this chapter of the Bankruptcy Code is available for that purpose. Business or corporate entities cannot file under chapter 13.
Many celebrities file under chapter 11 because they either make investments under some type of entity and want personal liability protection or they do not qualify for other chapters. Chapter 11 is very expensive, but it does allow an entity to avoid certain contracts and has other benefits connected with the filing.
If a business files under chapter 11, the executives of the company will have to show that they are competent enough to continue operating the business during the bankruptcy. If creditors object or if the Trustee feels he can run the business more efficiently, then the Trustee may try and remove the executives from management and run the business himself.
If you have questions about bankruptcy in general, please contact Jacksonville Bankruptcy Attorney.
Greg Gilbert
Keith Maynard
