Large and small offshore service companies are turning to the Bankruptcy Code for help with restructuring their balance sheet, and turning to Washington for help with generating more work. One of the largest offshore service companies in the world, Tidewater , announced this week that it will file a Chapter 11 ….
- To Fanny Brawne.
- ForGIFTness - How to forgive and live.
- All About Airedale Terriers.
A single amended and restated …. Eric Lockridge and Benjamin M.
The U. The Notes were secured by a first mortgage on the Property. After a series of modification agreements and forbearance agreements to extend the due dates for the Notes, the then-current holder of the Notes initiated foreclosure proceedings on the Property. The debtor filed its petition for relief under Chapter 11 of the Bankruptcy Code one day before the scheduled foreclosure sale, which stayed the foreclosure proceedings.
- FREQUENTLY ASKED QUESTIONS – CHAPTER 11 FOR INDIVIDUALS AND SMALL BUSINESSES.
- Achieve Lasting Happiness:Timeless Secrets to Transform Your Life!
- Legislative Reasoning for the Chapter 11 Program?
- Chapter 11 Filing Procedure;
- Decoding the IRA: A Groundbreaking History.
- Long Island Small Business Bankruptcy Attorney.
LLC obtained acquisition and construction financing from a bank 1st Bank , which properly recorded its mortgage on the project before work commenced. As often happens , a dispute developed between LLC and Contractor regarding the work performed and lack of payment. Once the lien was cancelled, 1st Bank funded two draw requests on the construction loan.
LLC needed more money for the project and turned to a new lender 2nd Bank for additional financing. Contractor sued LLC and its principals on the matured promissory note, and also sued LLC based on its rights under the recorded construction contract and the Louisiana Private Works Act. Yes, according to several recent court decisions.
Bankruptcy Code. The number of businesses seeking bankruptcy protection hit its highest level in more than two years in March, as the recession sends more companies into financial crisis, according to a story today in the Dow Jones Daily Bankruptcy Review.
A typical liquidation situation is where a business has relatively little value as an ongoing concern but there are sufficient assets that could be sold to pay the creditors. Chapter 11 liquidations are controlled by the business owner. The theory is that the business owner is in a better position to get the most value for the sale of business assets. A Chapter 11 case can convert to a Chapter 7 for liquidation, but there are many reasons why a Chapter 11 debtor prefers the liquidating trust.
The debtor may be able to do a better job liquidating the assets because it knows the market for the assets and believes that it will get more money through a gradual asset sale than could a Chapter 7 trustee who is not familiar with the market for business assets. If there is any money left after liquidation and payments to creditors, that money goes back to the debtor business or its equity holders.
Individuals have a very difficult time in Chapter 11, and for that reason most individual Chapter 11 bankruptcies fail.
Bankruptcy and Creditors' Rights
Chapter 11 for an individual can be successful if the goals are limited. For example, if an individual is a few payments behind on secured debt and needs a limited amount of time to catch up, Chapter 11 could buy the individual enough time to make up past due payments and emerge rather quickly with a completed and successful Chapter 11 plan. More complicated individual financial situations are not typically solved in a Chapter 11 because of the complexity of Chapter 11 and its relatively high costs and fees. Individuals who are seeking protection but do not qualify for Chapter 13 are better off finding solutions outside the bankruptcy court.
The central part of a Chapter 11 bankruptcy is the design, approval, and administration of a reorganization plan. A Chapter 11 plan starts by dividing the creditors into various classifications including priority creditors, administrative creditors, secured creditors, and unsecured creditors. The plan proposes how much money each of these creditor classes are going to be paid, how the debt is restructured, and the terms of the payments. Usually a plan lasts about five years, but with court approval the term could be extended for up to ten years.
Chapter 11 plans must provide that the superior class of creditors such as administrative creditors or priority creditors are paid in full before payments are made to the junior classes.
That typically occurs when claims are bifurcated into secured and unsecured portions. If the current value of property securing a claim is less than the amount of the debt, the court may split the claim into two parts — one being a secured claim to the extent of the property value and the other being an unsecured claim for the balance of the debt.
The Chapter 11 debtor files the plan and a financial disclosure statement and serves both to all creditors. The plan is subject to approval by the creditors, each of whom is entitled to vote for approval or rejection. The court often approves a Chapter 11 plan over the objection of one or more creditors or creditor classes. The role of the trustee is different in each of the bankruptcy chapters. In Chapter 7 cases, there is a panel of individual trustees each of which are assigned to Chapter 7 cases.
Chapter 11 bankruptcy is administered by the Office of the United States Trustee. Chapter 11 bankruptcy, like Chapter 13 bankruptcy, involves repayment of debts. In Chapter 13, the plan is evaluated and approved or rejected by the Chapter 13 trustee. The US Trustee is less directly involved than is a Chapter 13 trustee in plan approval. Chapter 11 bankruptcy is much more expensive than consumer bankruptcies filed under Chapter 7 and 13 as there are more procedures and reports built into the bankruptcy Code and bankruptcy rules including first day motions, the bankruptcy reorganization plan, monthly reports, and disclosure statements.
The Chapter 11 bankruptcy plan is much more precise than those prepared in consumer cases.
Legal work related to a Chapter 11 not only requires more time, it requires substantial expertise and more experience than the legal work involved in a consumer bankruptcy proceeding. Chapter 11 bankruptcy procedures are set up to accommodate the largest corporations and businesses in our country. The same steps, procedures, and requirements apply to a small business. Chapter 11 Filing Procedure Chapter 11 bankruptcy, like bankruptcy under other chapters, starts with the general filing of a bankruptcy petition, supporting schedules, and statement of financial affairs.
Chapter 11 Liquidations Chapter 11 plans may provide for the liquidation of business assets rather than for reorganization of an operating business. Chapter 11 Plan The central part of a Chapter 11 bankruptcy is the design, approval, and administration of a reorganization plan.