Chapter 11 of the Bankruptcy Code provides a mechanism for businesses experiencing financial problems to restructure and reduce debt through a court-approved plan of reorganization. Through a Chapter 11 bankruptcy case, a struggling company may be able to reschedule secured bank debt, reduce the amount of accounts payable, extend payments over longer time periods, or cure existing defaults. The provisions of Chapter 11 are flexible, in order to permit creative solutions to business financial problems.
James Olson has more than 30 years of experience representing corporate debtors in Chapter 11 bankruptcy cases. Mr. Olson has represented small and medium sized businesses in a variety of industries regarding the restructuring of their finances through the vehicle of reorganization under Chapter 11 of the Bankruptcy Code. These include a hospital in Pennsylvania, a paving contractor in New York, a chain of shoe stores in Maryland, a provider of pre-paid telephone cards, a specialty supermarket, a strip mall, a nursing home operator, a medical imaging company, a regional delivery firm, a technology development company and various owners of distressed real estate.
Although less common, business firms may also seek the protection of Chapter 7 of the Bankruptcy Code. In a Chapter 7 case, a trustee appointed by the court supervises the liquidation of all the business assets. A Chapter 7 may be useful in a case where management does not have the time to conduct a liquidation or in order to convince a party bringing a lawsuit against the company that there really are no assets to collect. A Chapter 7 may also be useful in a situation where the owner wishes to purchase the business assets free and clear of creditor claims, in order to start a new business that is not burdened with existing debts.
Mr. Olson has represented a number of companies in Chapter 7 cases, where the circumstances warranted the use of Chapter 7.
In most cases where a business needs to cease its operations, liquidate its assets and wind up its affairs, it is more efficient and less costly for management to conduct the wind up itself, rather than filing a Chapter 7 case. Mr. Olson has advised numerous small businesses on the wind up of their affairs without the necessity of a bankruptcy.
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