When the Pew Law Center’s founding attorney, Lawrence ‘D’ Pew, meets with small business owners, he is often asked how a Chapter 11 Arizona business bankruptcy can help resolve debt problems. Be mindful that the Chapter 11 Arizona business bankruptcy involves a reorganization plan. If the business is in debt because of a failed market for the goods, or because sales were so low that operating costs could not be met, then reorganizing, or restructuring, the company may not resolve the underlying debt problems. But for many, including sole proprietors, a business bankruptcy filed under Chapter 11 of the U.S. Bankruptcy Code will do the following:
ONE. Chapter 11 Arizona Business Bankruptcy and the Debtor in Possession
Filing for debt relief with a Chapter 11 reorganization ordinarily results in the business owner becoming a debtor in possession (DIP). The DIP remains in control of the company’s day-to-day operations, while managing the business assets under a reorganization plan. As a business owner, that means you won’t have to surrender control during the Arizona business bankruptcy of the company you worked so hard to build! We understand that the people who created the company and provide the services understand better than anyone what is involved in running the organization, far better than any bankruptcy trustee.
TWO. Chapter 11 Fast-Track Arizona Business Bankruptcy
Under certain circumstances, filing for an Arizona business bankruptcy under Chapter 11 will allow for fast-track resolution. A small business with less than $2 million in debts may be fast-tracked through Chapter 11. A fast-track Arizona business bankruptcy streamlines many of the bankruptcy procedures that a regular Chapter 11 petitioner would otherwise have to complete. For example, the fast-tracked Arizona business bankruptcy:
• Can combine approval of the disclosure statement with the confirmation hearing.
• Can avoid appointment of a creditors’ committee in the case.
When the Arizona business bankruptcy is fast-tracked, the debtor has less time to file a plan. If the debtor doesn’t file a plan within 100 days from the court’s grant of an order for relief (issued shortly after the petition is filed), then any interested party can file a reorganization plan for the debtor. All plans for reorganization must be filed within 160 days after the order for relief is granted, however.
THREE. No Time Limit for the Chapter 11 Arizona Business Bankruptcy
That’s right, there is no time limit set for how long the business bankruptcy may continue. This gives the business debtor time to truly rehabilitate the company. Almost every Arizona business bankruptcy will either be dismissed after restructuring and rehabilitation or be converted to a Chapter 7 liquidation with the dissolution, or termination, of the company.
FOUR. Cram-Down Power of the Court in Chapter 11 Arizona Business Bankruptcy
Generally, a Chapter 11 plan must be approved by a majority of the Arizona business bankruptcy creditors. Should one or more classes of creditors reject the debtor’s proposed plan, then the debtor proceeds under the cram-down provision of the U.S. Bankruptcy Code. A cram-down allows the court to confirm a plan over and above the objections of creditors. If the court determines that the debtor’s reorganization plan is fair and equitable and doesn’t discriminate against the class of dissenting creditors, then the court can exercise its cram-down power and confirm the plan. In other words, the judge decides to cram the plan down on the objecting creditors, whether they like it or not.
Contact the Pew Law Center for Your Arizona Business Bankruptcy
Arizona business bankruptcy attorney Lawrence ‘D’ Pew has helped more than 2,000 area residents eliminate over $100 Million in debt through Chapter 7, Chapter 11, and Chapter 13. To learn how filing an Arizona business bankruptcy can solve your debt problems, call 480-719-1479 today and schedule a FREE VIP Bankruptcy Consultation. If you have questions and would like to chat with us online, visit our website anytime – 24/7. The Pew Law Center always has someone available to discuss the details of an Arizona business bankruptcy with you.