Rich Michaelson Magaliff Moser, LLP Rich Michaelson Magaliff Moser, LLP
Speak with one of our attorneys today.
TF 877.373.6811
|
NY 646.453.7851
Main Navigation
Real World Solutions To Real World Challenges
Best Lawyers | Best Law Firms | U.S.News & World Report | 2016 Best Lawyers | Best Law Firms | U.S.News & World Report | 2017

R3M has been voted a Best Law Firm by US News & World Report and Best Lawyers

Get Answers

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Preserving the integrity and function of the Chapter 11 bankruptcy process

In the United States today, business' financial and operational structures are increasingly becoming more complex. Through a series of financial deals and acquisitions, companies are often knowingly or unknowingly beholden to numerous parties and creditors, many of whom have very different and competing interests in whether a business ultimately succeeds or fails. Consequently, finding solutions to a business' debt problems has also become more complicated.

There's no doubt that Chapter 11 bankruptcy remains a viable option through which a company may attempt to reduce debts and liabilities to regain or attain profitability. However, today some argue that a growing number of businesses, along with those financial entities that have a vested interest in them, are taking advantage of the protections the bankruptcy process provides without actually addressing or finding permanent solutions to a business' underlying financial problems.

Traditionally, the Chapter 11 bankruptcy process was meant as a way for a struggling business to obtain protection from creditors while formulating and putting plans in action to "fix operational issues, offload bad contracts, and jettison failed divisions or projects." However, with so many involved parties and investors all competing for their share of the pie, some corporate bankruptcies can quickly digress into a proverbial free-for-all where attempts to recover debts come at the expense and cost of a business' employees and future success.

In order to prevent the latter, it's crucial that a business' leadership team all be on the same page with regard to a Chapter 11 reorganization plan. While, in many cases, a business will be forced to make some concessions during the bankruptcy process, a company's basic values should never be compromised.

In order to protect and preserve these values as well as a company's vision for continuing operations, it's crucial to have a team of seasoned and competent legal professionals on one's side.

Source: Miami Herald, "My View: Is Chapter 11 bankruptcy a sword or a shield?,"Joseph J. Luzinski, Oct. 31, 2015

No Comments

Leave a comment
Comment Information