Memphis Chapter 11 Bankruptcy Attorney
These situations can be exceedingly stressful, especially among small business owners right in Memphis. As a Memphis Chapter 11 bankruptcy attorney, John E. Dunlap has witnessed these situations far too often, but after 20 years of serving Memphis business owners, corporations, sole proprietorships, and partnerships, Attorney Dunlap knows that there are options to keep your doors open.
The filing fee for Chapter 11 bankruptcy cases is $1,717, making it the most expensive bankruptcy declaration. Nevertheless, with the help of a bankruptcy attorney, Chapter 11 bankruptcy will permit your business to continue operating while you pay creditors under a reorganization plan. If your business is facing extreme financial hardships and you plan on filing for Chapter 11 bankruptcy, it is essential to contact a Memphis attorney as soon as possible. Contact John E. Dunlap, P.C. today at (901) 320-1603 or visit or Memphis offices at 3294 Poplar Avenue. Click here for directions.
Understanding Chapter 11 Bankruptcy in Memphis TN
When consider Chapter 11 bankruptcy to save your business, it is essential to understand the very basics of this form of bankruptcy. Also known as “reorganization bankruptcy,” Chapter 11 is usually defined as when a debtor proposes a plan of reorganization to keep his/her business alive while paying creditors over time. This rearranged payment plan must be approved by creditors in Bankruptcy Court.
As such, the process begins by filing a petition to the Bankruptcy Court. For Memphis residents and residents that live in the Western Division of Tennessee, this court is located at One Memphis Place on 200 Jefferson Avenue, in Suite 410. Petitions can either be voluntary (filed by the debtor) or involuntary (filed by the creditor). If the debtor is an individual—Chapter 11 can, if the circumstances call for it, apply to individuals—there are additional filing requirements. At the time of filing, the fees must be paid to the Clerk of the Court.
Generally, a written disclosure statement and a plan of reorganization must be filed as well, and debtors will remain debtors in possession until this plan is confirmed, the case is dismissed or converted to Chapter 7, or a Chapter 11 trustee is appointed. Debtors typically have a 120-day period to exclusively file a plan.
Before confirmation of a plan, several activities typically take place, such as adversary proceedings, claims, conversions or dismissals, and others. Before the plan is accepted, the Bankruptcy Court must also determine whether the plan was proposed in good faith and according to Tennessee law. Confirmation of a plan discharges the debtor from any debts that arose before the date of confirmation, but the debtor must also make payments and is thereafter bound to the provisions set forth in the plan.
How Chapter 11 Bankruptcy Can Protect Your Business
In short, Chapter 11 Bankruptcy essentially protects businesses from lawsuits and creditors while they work to manage and absolve its financial obligations. Operations are allowed to continue under the supervision of the Bankruptcy Court, and by paying down debts, the business can return to its regular operation without oversight from the courts. Under reorganization, the business can:
- Restructure terms of unsecured debt owed to creditors
- Renegotiate or cancel leases and other contracts that are no longer beneficial to the company
- “Cramdown” loan payments for things such as company equipment
- Reorganize state and federal tax obligations
Adverse Situations in Chapter 11 Bankrupcty
In addition to understanding Chapter 11 Bankruptcy, it is also important to know how the Bankruptcy Court can deny Chapter 11 discharges. For example, the Court can immediately deny discharge if they find that debtors are concealing property, falsifying or destroying records, or committing fraud. In this situation, the debtor could be facing criminal charges.
Furthermore, the Court can deny approval if it finds the reorganization plan unfeasible, not proposed in good faith, or by not paying the correct amounts established by law. Creditors also have the chance to vote to not approve the plan.
Contact John E. Dunlap, P.C.
The benefits of Chapter 11 Bankruptcy can help business owners, sole proprietorships, and others from lawsuits or falling deeper into debt. From negotiating with creditors to distributing your liquidated assets, John E. Dunlap, P.C. has extensive experience working with hundreds of Memphis clients. Our law firm offers diligent representation in Bankruptcy Court, strategic counseling, and assertive advocacy for the future of your business. It is up to both small and large businesses to help keep Memphis the wonderful city it is, and John E. Dunlap remains devoted to helping businesses of all sorts. If you are planning on filing for Chapter 11 Bankruptcy, contact John E. Dunlap today at (901) 320-1603 for a free consultation.