Chapter 11 — just the sound of it evokes strong feelings in most people. Although filing for bankruptcy is rarely a business's first choice when trying to cope with overwhelming debt, the decision to file for bankruptcy can be the right one when made with full awareness of all its consequences. Contact our firm to schedule a consultation with an experienced bankruptcy lawyer to discuss your options.
Tampa, Florida, Chapter 11 Reorganization Lawyers
The law firm of Buddy D. Ford, P.A., represents businesses and individuals in all aspects of Chapter 11 debt reorganization. Our founding attorney, Buddy D. Ford, is a Board Certified Specialist in business bankruptcy law by the American Board of Certification. He has represented countless clients in these proceedings, and he can help you navigate this sometimes overwhelming area of law.
Contact our office today to learn more about our debt reorganization services and how we can help you. You can reach us by phone at 813-463-2835, toll free at 877-547-1561 or via e-mail.
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Contact the law firm of Buddy D. Ford, P.A., to discuss your business bankruptcy questions. We will take the time to listen to your concerns and your goals in order to make the best possible recommendation for your situation.
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Operating a Business During Chapter 11
The key to a successful Chapter 11 case is the continued operation of the debtor's business. In addition to running the business, the debtor (as debtor in possession) or the trustee must fulfill additional duties required by the Bankruptcy Code and work with creditors, the court, and other parties to obtain financing for ongoing business operations.
If you have questions about or would like assistance with operating a business during Chapter 11, contact Buddy D. Ford, P.A. in Tampa, FL, to schedule a consultation with an attorney.
Who Operates the Business?
In most Chapter 11 cases, the debtor assumes the status of debtor in possession (DIP) and continues to run the business in that capacity until confirmation of the Chapter 11 plan. In some cases, a trustee will be appointed by the court to run the debtor's business and perform other tasks required by law or court order.
Debtor in Possession (DIP). In most Chapter 11 cases the debtor continues to manage and run the business as a debtor in possession (DIP). As a DIP, the debtor is usually responsible for additional duties, including:
- Accounting for property
- Examining and objecting to claims
- Filing required reports with the Bankruptcy Court
- Employing attorneys, accountants, appraisers, auctioneers, and other professionals to assist with the case
Trustee. Any party in interest or the U.S. trustee may request that a trustee be appointed at any time prior to confirmation of the plan. A trustee may be selected by the creditors or, with court approval, by the U.S. trustee. The court will only appoint a trustee after notice and a hearing if there is cause (fraud, dishonesty, gross mismanagement, or incompetence of the debtor) or if appointing a trustee is "in the interest of creditors, any equity security holders, and other interests of the estate." 11 USCA § 1104(a). In addition to operating the debtor's business, the trustee is responsible for managing the property of the estate and filing the plan. The trustee's appointment may be terminated at any time prior to confirmation upon the request of a party in interest or the U.S. trustee.
Other Parties Involved in Chapter 11 Cases
Examiner. In some Chapter 11 cases, a party in interest may request the appointment of an examiner. An examiner can only be appointed after notice and a hearing if a trustee has not been appointed and the debtor's non-trade, non-tax, unsecured debt is greater than $5 million or the appointment is "in the interest of creditors, any equity security holders, and other interests of the estate." 11 USCA § 1104(c). An examiner does not run the debtor's business, formulate the plan, or perform other duties of the trustee unless the court orders the DIP not to perform those functions. The examiner does investigate and file a report regarding the competency or honesty of the debtor and perform other duties assigned by the court.
United States Trustee (U.S. Trustee). The U.S. trustee supervises the administration of the case and monitors the progress of the case, the operation of business, the submission of required fees and reports, and the applications for compensation of professionals filed with creditor's committee. The U.S. trustee also conducts the "section 341 meeting" of the creditors.
Speak to a Bankruptcy Lawyer
For more information about operating a business during Chapter 11, contact Buddy D. Ford, P.A. in Tampa, FL, to schedule a consultation with a lawyer.
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