Helping California Businesses and Business Owners Deal With Debt
Hinds & Shankman, LLP routinely represents corporations, sole proprietorships, partnerships, restaurants, landlords, manufacturers, distributors, automobile retailers and rental car companies, construction companies, oil producers, retailers, health care providers, hotels, resorts, golf clubs, and virtually every type of business and business owner experiencing financial hardship. If not addressed, these businesses and their owners often lay off employees and close their businesses, while the debts remain unpaid.
We understand the types of options businesses can take to prevent any of this from occurring. Our firm works toward helping businesses and business owners restructure and put their affairs in order. Sometimes we do this through Chapter 7 bankruptcy filings, and at other times we do this through Chapter 11 bankruptcy filings. Whatever option you pursue, we place your interests as our foremost concern. We listen and we help you shape and achieve your business and personal goals.
What Is Business Bankruptcy?
The type of relief a business receives from bankruptcy depends upon the type of bankruptcy chosen. Depending upon the circumstances, the business can liquidate debts through Chapter 7 bankruptcy, or deal with the debt situation by reorganizing the manner in which it does business through Chapter 11 bankruptcy.
It is important not to make a mistake in choosing your business bankruptcy option. Choosing the correct method is dependent upon the direction you want to see your business go. For example, while you can get rid of debt through Chapter 7 bankruptcy, it also means in certain cases liquidating a substantial portion of your business assets. On the other hand, filing Chapter 11 bankruptcy means there will still be certain debts to pay after the filing and substantial legal and administrative costs to comply with all necessary requirements.
The professionals at Hinds & Shankman, LLP provide you the guidance you need to meet your financial and business goals. We will design a plan for you that meet your business needs and concerns, based on decades of successful experience and knowledge.
Chapter 7 For Businesses and Business Owners
What You Should Know
The current economic conditions has made it more and more difficult for a broad variety of businesses and their owners in California to keep up with their overhead and debts. Unfortunately for some, the debt is simply too much and the business is no longer able to stay afloat. Let us help you get back on your feet today.
How Business Liquidation Works
In Chapter 7 bankruptcy, the bankruptcy court appoints a trustee to liquidate the business=s assets and distribute the proceeds to the business’s creditors. After the process is finished, the business ceases to exist. Although the business entity is not discharged in a Chapter 7 from its debts, the only viable remedies for the creditors are to receive a dividend from remaining assets, if they exist, or to pursue individual guarantors, if any, of the subject debt(s). Although Chapter 7 bankruptcy means the business has to close down (unless in rare instances a Trustee will see value in operating certain businesses for profit and attempt to sell same as an ongoing concern, or wind down the business in an orderly fashion to maximize recovery), Chapter 7 for businesses does have certain advantages: it announces the end of operation of the business and the creditors will be stopped from undertaking collection actions against the business.
If the individual business owner files a Chapter 7 to deal with business debt (such as debt based upon a personal guarantee of a business debt, or debt incurred by a sole proprietor) absent fraud, or intentional and wilful misconduct, the business and personal debt of that individual business owner will be discharged and the creditors will be permanently enjoined from collecting on the debts.
Business Bankruptcy Alternatives
A business approaching bankruptcy may also file a Chapter 11, if appropriate, to restructure its balance sheet, obtain time to sell off certain non-performing assets, or find investors to save the business, while maintaining operations. or to maintain control over a liquidation process over an ongoing business, or to maximize a recovery from a closed entity, if appropriate. Chapter 7 is the sole option that involves forfeiting the business assets to a Trustee and a complete and final loss of control over the business and its assets.
To learn more about bankruptcy in California, contact Hinds & Shankman, LLP to set up a 20-minute free initial consultation with an experienced bankruptcy lawyer by calling (310) 316-0500. Our office is located in Torrance, California.
Chapter 11 Bankruptcy
What You Should Know
The economic downturn has forced many businesses, large, medium, and small, to file for Chapter 11 bankruptcy. Chapter 11, also known as reorganization, is a complex process that requires experienced guidance and counsel. This is where our professional team can help.
What Is Chapter 11 Bankruptcy?
In Chapter 11 bankruptcy, the filing business, or, if a sole proprietorship, makes an attempt to come up with a new payment plan to reorganize its debt, if possible, or to orchestrate an orderly sale as an ongoing concern, or major financial restructuring through bank, private, or investor financing as approved by the Court. This plan is presented to creditors in bankruptcy court. The creditors then cast ballots to vote on whether or not to accept it. If there is agreement, the plan becomes a new contractual agreement between the parties.
If they disagree, your bankruptcy lawyer can guide you, with a team of financial and business experts in your industry, to come up with a new plan, or the bankruptcy court can impose the plan on the creditors or the negotiations may simply end up failing. Our professional bankruptcy attorneys have the necessary experience to help you reach a Chapter 11 bankruptcy reorganization, or liquidating plan that creditors or judges will accept.
What’s Involved In Bankruptcy Reorganization?
The Chapter 11 reorganization most likely will involve an attempt to reduce the value of the business’s debts to match the value of its assets. Debts in excess of the value of the business assets are treated as unsecured, and a large amount of them are forgiven. Secured debts can also be re‑negotiated, or litigated to achieve a lower interest rate and for a longer repayment duration.
Contact Us Today
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
To learn more about what you can do regarding your business debt or bankruptcy in California, we invite you to contact us today online or by telephone at 310-316-0500 to arrange a consultation.