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Helping Business Owners Succeed Throughout South Florida

Our Miami Chapter 11 bankruptcy lawyers understand that bankruptcy isn’t anybody’s first choice, and it isn’t anything business owners look forward to or anticipate when they are starting out. At the same time, bankruptcy isn’t a dirty word, and it doesn’t spell doom or the end for a struggling enterprise. When Chapter 11 works as it should, companies exit bankruptcy leaner, stronger and more efficient than before, ready to take on the competition and become a profitable leader in the industry.

Chapter 11 is a voluntary, strategic decision made by business owners facing significant debt and financial troubles. In South Florida, the bankruptcy litigation attorneys at Edelboim Lieberman in Miami and Fort Lauderdale work with you to develop a plan that helps you achieve your goals. Our experienced Chapter 11 lawyers can create a plan with you that is fair and equitable, considers the interests of your creditors and is as good or better for them than a Chapter 7 liquidation bankruptcy, is feasible and is developed in good faith. A Chapter 11 plan with these features is likely to meet your needs and be approved (confirmed) by the bankruptcy court.

Chapter 11 bankruptcy is a complex procedure, and not all Chapter 11s succeed. Choose a law firm with a record of sustained success in successfully reorganizing under Chapter 11. In Miami and South Florida, choose Edelboim Lieberman to guide you and assist you through the Chapter 11 process.

Should Your Company File for a Chapter 11 Bankruptcy?

While filing for bankruptcy under Chapter 11 affords a variety of benefits under the right circumstances, it isn’t right for all companies. So, should your company hire a Miami Chapter 11 bankruptcy lawyer?

Here is a non-exclusive list of factors that company leaders should consider when deciding whether to pursue a business bankruptcy under Chapter 11:

1. Will a Chapter 11 Filing Make Your Business Sustainable?

Generally speaking, the purpose of filing for bankruptcy under Chapter 11 is to secure relief from unmanageable payment obligations. It does not eliminate the company’s debt. So, if your company can remain operational—and ideally grow—with a reorganized payment plan, then filing under Chapter 11 may be a good option. However, if reorganizing your company’s debts is not likely to lead to sustainability, then it may not make sense to pursue a Chapter 11 bankruptcy.

2. Does It Make Sense to Keep the Business Afloat?

Even if a Chapter 11 bankruptcy may provide a path to sustainability, does it make sense to keep the business afloat? Or is reorganizing the business’s debts a temporary solution to a bigger problem? Are you still passionate about making the business succeed? Before investing time and money in a Chapter 11 bankruptcy petition, it is important to thoughtfully consider these types of questions.  

3. Are There Other (More Desirable) Options Available?

It is also important to consider whether your company may have more desirable options available. For example, if reorganizing your company’s debts isn’t likely to lead to long-term stability and growth, then it may be time to consider a Chapter 7 liquidation instead. Alternatively, renegotiating some (or all) of your company’s liabilities outside of the formal bankruptcy process could offer a more efficient solution. There are a variety of other options as well—all of which may make more or less sense depending on your company’s current financial circumstances and your business goals.

4. Are You Prepared to Deal with the Rules and Requirements of Chapter 11?

Filing for business bankruptcy under Chapter 11 is a process, not an event. After filing for bankruptcy under Chapter 11, companies and their owners must work through the process, seeking court approval as necessary. While a Miami Chapter 11 bankruptcy lawyer will be able to handle much of the process for you, you will play an integral role in the process as well.

5. Is Filing for Bankruptcy Under Chapter 11 Your Company’s Best Option?

Ultimately, taking all relevant factors into consideration, you need to determine if filing for bankruptcy under Chapter 11 is your company’s best option. If it is, then moving forward promptly will allow your company to get back on the solid financial ground as soon as possible. If it isn’t, then investing in a Chapter 11 bankruptcy petition could mean throwing good money after bad. To make an informed decision, you will want to carefully evaluate all of your options with an experienced Miami Chapter 11 bankruptcy lawyer. 

Filing Chapter 11 Invokes the “Automatic Stay”

One of the most powerful tools for the bankruptcy filer is the “automatic stay” which goes into effect when the Chapter 11 petition is filed with the court. This provision puts the company’s creditors on notice that a bankruptcy is underway and puts an immediate stop to all collection efforts, from phone calls and demand letters to civil lawsuits, collection of judgments, or lien foreclosures. The automatic stay provides immediate relief to the business owners, giving them the breathing room they need to step back and formulate a strategic, reasonable plan for dealing with their debt and business financial issues.

Chapter 11 Lets You Restructure and Reorganize

While the automatic stay is in place, you can negotiate with your creditors for more favorable terms. Most often, your creditors would rather see you succeed and pay off your debt to them or continue your business relationship rather than watch you go under while they possibly lose their ability to collect on the debt or do future business. Some debts can also be adjusted or discharged (eliminated) as part of the Chapter 11 process.

Chapter 11 allows you wide latitude to develop and adopt a plan that will lead you out of debt and onward to profitability. Your Miami Chapter 11 bankruptcy lawyer will outline how you might sell assets, raise additional capital from outside investors or lenders, or reorganize your business, such as cutting costs and streamlining operations.

Chapter 11 Leaves You in Charge

Except in cases involving evident fraud or gross mismanagement, the court in a Chapter 11 proceeding does not appoint a bankruptcy trustee to take over running the business. Instead, the business owner continues to manage operations and run the business as the “debtor in possession” while the plan of reorganization is being developed and submitted to the court for confirmation.

The court still maintains the supervision, and some major decisions must be approved by the court before they can be undertaken. These may include selling assets, entering into new leases, securing new mortgages or financing, modifying contracts, or shutting down or expanding operations. Subject to these conditions, the business owner can continue overseeing the daily running of the business, maintaining contacts and goodwill with company employees, customers, and vendors.

Build Back Your Business Better Than Before With the Help of an Experienced Miami Chapter 11 Bankruptcy Lawyer

To find out if Chapter 11 is the best move for your South Florida business, call Edelboim Lieberman in Miami and Fort Lauderdale at 305-768-9909 to speak with one of our experienced and successful business bankruptcy attorneys. Your initial consultation is confidential and free.

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