In one of our recent posts, we discussed a drug maker’s decision to file for Chapter 11 bankruptcy protection, which provides the company with an automatic stay against creditor actions. While Chapter 11 certainly has its benefits, such as letting the filer continue operations while restructuring, business owners should be absolutely certain that bankruptcy is right for their particular situation.
Attorneys at Shulman Bastian Friedman & Bui LLP have experience in handling bankruptcy cases, as well as achieving out-of-court solutions. If your business is struggling with debt, then all of your financial and legal obligations should be carefully analyzed before you decide to file for bankruptcy, whether it’s Chapter 11 or Chapter 7.
It is possible in many cases to negotiate for out-of-court workouts that don’t carry the cost and time consumption that come with bankruptcy and litigation. For example, a corporate dissolution may be appropriate, or an ABC — statutory assignment for the benefit of creditors — could be the right option.
Full-service business lawyers can also help you restructure or negotiate your debt out of court. It may also be possible to exchange debt for equity, renegotiate interest rates, restructure security agreements and pledge collateral to meet your goals.
The key is to create a debt relief plan that is right for your specific needs and those of your business. A mistake at any point in the process could lead to additional costs, so it is important to have legal guidance to achieve a solution that protects your present and future interests.