Patterson Belknap Webb & Tyler LLP’s Post

Revitalizing Your Business: A Comprehensive Guide to Navigating Chapter 11 Bankruptcy Successfully Navigating the complex waters of financial distress requires a robust understanding and strategic approach, especially when it involves Chapter 11 bankruptcy. This legal provision, designed primarily for businesses, allows corporations, partnerships, and even individuals to reorganize and restructure their debts under the supervision of the bankruptcy court. Chapter 11 stands out as a beacon of hope for companies striving to regain profitability and operational stability without dissolving their enterprise. The process of filing for Chapter 11 offers a pathway to restructure debt while maintaining control over business operations, a critical advantage for entities seeking a fresh start. By allowing businesses to propose a plan of reorganization, Chapter 11 bankruptcy empowers companies to renegotiate terms with creditors, landlords, and suppliers, ensuring a more feasible ... #AutomaticStay #bankruptcycourt #bankruptcylaw #bankruptcyprocess #businessbankruptcy #Chapter11bankruptcy #creditornegotiations #DebtRestructuring #debtorinpossession #DIPfinancing #filingforChapter11 #FinancialDistress #financialrecovery #legaladviceonbankruptcy #reorganizationbankruptcy #reorganizationplan

Subchapter V bankruptcy is a relatively new provision added to the U.S. Bankruptcy Code by the Small Business Reorganization Act (SBRA) of 2019. Designed specifically for small businesses, Subchapter V offers a streamlined and cost-effective way to reorganize debts while maintaining operations. If you own a small business and need to reorganize your debt, Subchapter V provides a different take on Chapter 11 that might work better for you. Keep reading to learn more. https://lnkd.in/g_Qb5gvf

As noted here in this article on Daily DAC LLC - Distressed Asset Central from CRA Member Michael Brandess of Husch Blackwell, there is a clear prioritization of payment status in #bankruptcy claims. As states update their #receivership statutes most are building in a prioritization, typically similar to the bankruptcy prioritizations. However, many states have not updated their receivership statutes (in fact more than 60%) making even the receivers fees a question through the process. In states like this, and really even in states where there is a statute on payment prioritization, a receivers first step (often before even taking the appointment) should be to have a discussion with the secured creditor(s) on payment and reach an agreement. What other steps do you take in your process to ensure your fees and those you engage are paid for your efforts? https://lnkd.in/dMfUmeVU #commercialreceivership #receiverships #insolvency #turnaround #turnarounds #turnaroundmanagement #restructuring

I have had the privilege of serving as one of the first Chapter 11 Subchapter V bankruptcy trustees since the provision was enacted. It's disheartening to see that the debt limits provision did not get re-extended to the $7,500,000 limit. Many small businesses struggle to survive the pressures and costs of a full Chapter 11 filing, making Subchapter V a crucial lifeline. It has been a game-changer for numerous small businesses navigating financial crises, allowing them to not just survive but thrive. Through my involvement in various small business restructurings, I've witnessed firsthand how Subchapter V enables these businesses to restructure, retain employees, and ensure creditors receive a higher return compared to liquidation. It's truly a win-win-win for all parties involved. Read more about the impact of small business bankruptcy rules tightening: https://lnkd.in/eMVwfK3M

Joseph C. Barsalona II, Partner in the Bankruptcy, Restructuring and Creditors’ Rights practice at Pashman Sten Walder Hayden P.C., was recently quoted in an article in The Deal titled, “Washington Inertia Threatens Key Bankruptcy Provision.” The article discusses the 2019 Small Business Reorganization Act, which allows businesses with debt totaling less than $7.5million, to go through bankruptcy proceedings quickly and cheaply, among other benefits. Despite being maintained via the March 2022 Covid-19 Bankruptcy Relief Extension Act, if Congress fails to act by June 21, the limit will revert to the original $2.7 million level. “[It would be] incredibly harmful to small businesses,” said Barsalona, who's been involved in several Subchapter V cases, including that of Lunya Co., a loungewear and sleepwear brand. “It will be a lost opportunity to help middle market businesses reorganize and will potentially increase liquidations under both state and federal law.” “Equity investors should care because they will lose their only means of getting a recovery in their small investments. I’ve said it once and I’ll say it a million times: there is no other restructuring law in the world that gives equity holders the opportunity to retain value like Subchapter V. The ramifications of more liquidations will lead to negative impacts on the macro economy and will set other trends in motion for medium and larger credit defaults,” said Barsalona. To read more, click here: https://zurl.co/wwvk

Chapter 11 bankruptcy offers businesses a chance to restructure and reorganize debt while continuing operations. Key steps include assembling a professional team, filing a petition, developing a reorganization plan, and securing creditor approval. Advantages include continued operations and automatic stay protection, while disadvantages involve high costs and potential loss of control. The process involves significant legal and financial scrutiny and can last months or years. It’s crucial to evaluate options, protect assets, and implement a robust plan for post-reorganization success. For small businesses, Subchapter V offers a streamlined process. Read the full guide here: https://lnkd.in/dzZX3ANz #Chapter11 #Bankruptcy #BusinessRestructuring #DebtReorganization #LegalAdvice #BusinessRecovery

Good article explaining the 2019 Small Business Reorganization Act and the debt limit adjustments that were enacted and later extended in 2020 via the CARES Act! If not extended, this will definitely cause a lot of pain for small businesses by dropping the qualifying debt limits from "less than $7.5MM" back to its previous debt limit of "less than $2.7MM". Recommended read!

We are honored to be named one of the 2023 “Bankruptcy Groups of the Year” by Law360 for our role advising on the largest and most complex restructurings and insolvencies of the last year.   #Restructuring

The two book suggestions are definitely NOT related to our group's latest accolade reposted below. The Best Minds: A Story of Friendship, Madness and the Tragedy of Good Intentions (about someone I distantly knew in law school). On the dangers of confusing brilliance for mental health and stability. (Though I still think The Center Cannot Hold is the best book I have ever read about mental illness.) Himself by Jess Kidd (murder, ghosts and some great characters in rural Ireland). And as to work and our Rx group at DPW:

Navigating The Bankruptcy Process – A Step-by-Step Guide Overwhelmed by the complexities of the bankruptcy process? Filing for bankruptcy can be a daunting and overwhelming task, but with the right information and guidance, you can successfully navigate through it. In this step-by-step guide, we will break down the bankruptcy process to help you understand each stage and what to expect, ensuring you are well-prepared to take on this legal process.Types of Bankruptcy Before delving into the specifics of each type of bankruptcy, it is important to have a basic understanding of the different options available to individuals or businesses facing financial distress. There are several types of bankruptcy proceedings, each designed to address various financial situations and provide a path towards debt relief. Understanding the differences between these options is crucial in determining the most suitable course of action. Chapter 7: Liquidation Bankruptcy Chapter 11: Reorganization Bankruptcy Chapter 13: Wage Earner's Plan Special Types: Chapters 9, ... #Bankruptcy #Bankruptcyassistance #bankruptcyprocess #bankruptcysteps #DebtResolution #financialrecovery #Guide #LegalAdvice #legalconsultation #legalguide #navigatingbankruptcy #Process #stepbystepbankruptcy