Chapter 11 Bankruptcy Representation In Columbus For Ohio Businesses
Chapter 11 bankruptcy is a legal process designed specifically for businesses seeking to reorganize their debts while continuing operations. Unlike Chapter 7 bankruptcy, which involves liquidating assets to pay off creditors, Chapter 11 allows businesses to develop a plan to repay debts over time. This type of bankruptcy can be a vital tool for companies facing financial difficulties, offering a way to restructure obligations and emerge stronger.
Our firm, Zagrans Law Firm LLC, has extensive experience handling business bankruptcy cases. Our managing partner, Eric H. Zagrans, brings over 45 years of experience in corporate bankruptcy law and provides elite legal advice, procedural assistance, and courtroom representation.
How Does Chapter 11 Bankruptcy Work In Ohio?
Filing for Chapter 11 bankruptcy protection allows a business to create a plan for repaying creditors while continuing operations. It requires detailed financial planning and court approval. The process begins with filing a Chapter 11 bankruptcy petition in one of Ohio’s U.S. federal district courts, which can be found in Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown. Our Ohio bankruptcy lawyer can assist with this filing, which is a highly complex and detailed document that must include lists of assets, liabilities, income, and expenditures, as well as a summary of financial affairs and other documents.
Once the court accepts the petition, all debt collection actions are halted. This stay allows businesses to focus on restructuring without immediate pressure from creditors. Businesses then have 120 days to propose a reorganization plan, which creditors will vote on. If the creditors approve, a court-appointed trustee oversees the implementation of this plan. If the business fails to comply, creditors may resume collection efforts. An ethical Ohio Chapter 11 bankruptcy attorney ensures clients understand the benefits and risks involved.
Benefits Of Filing For Chapter 11 Bankruptcy
Filing for Chapter 11 bankruptcy protection brings immediate relief by halting debt collection activities. This pause allows business owners to focus on debt consolidation and restructuring. Owners gain control and the exclusive right to propose a reorganization plan. This flexibility can help businesses exit unfavorable contracts and conserve funds. Tax debts can be included in the proposal, and some unsecured debts may be reduced or forgiven.
Chapter 11 also helps companies secure debtor-in-possession financing, enabling continued operations. This means businesses can keep paying taxes, employee wages, and other essential expenses. This stability reassures employees, vendors and customers that your company is still operating at its usual standards. It can also preserve the business’s reputation and customer base. Owners can also sell assets free from claims, facilitating potential sales to generate funds.
Possible Court Challenges To A Chapter 11 Filing
Being granted Chapter 11 bankruptcy protection is not automatic. A bankruptcy judge might reject a filing if they find the company’s debt problems are due to its owners or managers mismanaging assets. Additionally, the judge could convert the case to a Chapter 7 filing, which involves liquidation rather than reorganization. This conversion could force the business to sell assets and jeopardize its continued operations. These risks underscore the importance of working with a competent Columbus Chapter 11 bankruptcy attorney.
Take The First Step To Getting Your Debt Back Under Control
Ohio businesses considering Chapter 11 bankruptcy should consult with an experienced Columbus bankruptcy lawyer. Our firm can help you understand the process and create a plan that meets your needs while satisfying creditors. Contact Zagrans Law Firm LLC at 440-452-7100 or use our online email form to request your confidential legal consultation.