Through the course of business, an individual proprietor or corporation may at times be faced with the burden of debt. Under such circumstances, one of the few options available may be seeking a way to reorganize the entire business structure by way of declaring bankruptcy. Declaring bankruptcy, by filing through Chapter 11, is intended to achieve such a result and it is commonly being used in different parts of the country by ailing businesses and corporations.
A Chapter 11 filing provides the bankrupt company with a breathing space by allowing it to evaluate different plans that can generate profit, including ways of cost minimization, enhancement of cash flow or even acquisition of assets that can be potential revenue earners. While the company is busy doing this, the creditors cannot get ahold of the assets the company owns and enforce their charges. This allows the business debt negotiations to proceed in a smooth and uninterrupted fashion. While business bankruptcy of this nature can be more expensive and time consuming, it is still of considerable use to the proprietor of the business.
Most Maryland residents are probably familiar with the Maryland Daily Record. The proprietor company of this newspaper has recently chosen to file a Chapter 11 bankruptcy, with the intention of restructuring its balance sheet with inputs from its secured creditors. Although the leadership of the company is undergoing certain changes, the business of the newspaper is supposed to continue unabated, which is one of the advantages of this process.
Although this form of bankruptcy filing is an attractive solution for insolvent businesses, given the legal and procedural complications involved in the process, getting the right information about all available options is usually essential for the proprietor to achieve all the goals aimed for. For the best results, always seek the counsel of a qualified Bethesda Maryland Chapter 11 Attorney before filing.
Source: Baltimore Business Journal, “Maryland Daily Record parent to file for Chapter 11 bankruptcy; founder, COO resign,” John Vomhof Jr., March 20, 2014