Sacramento Bankruptcy Attorney Discusses Chapter 13 Bankruptcy
Sacramento Bankruptcy Attorney Discusses Chapter 13 Bankruptcy
There are many considerations and preparation when thinking about bankruptcy in terms of owning a business. Most likely, if you own a business, you will be filing a Chapter 11 bankruptcy where you will have to come up with a payment plan to pay off the debts. If you own a larger business and this constitutes a large bankruptcy, committees of creditors and stockholders typically negotiate a plan with the company to relieve the company from repaying part of its debt so that the company can try to get back on its feet. One committee that must be formed is called the "official committee of unsecured creditors." They represent all unsecured creditors, including bondholders. If the company has publicly held bonds, the "indenture trustee," often a bank hired by the company when it originally issued a bond, may sit on the committee.
Additional official committees may sometimes be appointed to represent stockholders. The U.S. Trustee may appoint another committee to represent a distinct class of creditors, such as secured creditors, employees or subordinated bondholders. After the committees work with the company to develop a plan, the court must find that it legally complies with the Bankruptcy Code before the plan can be implemented. This process is known as plan confirmation. This can take a few months or a few years.
The debtor company develops a plan with the various committees. The company or its counsel usually prepares a disclosure statement and reorganization plan and files it with the court. If it is complete (if the company is publicly held, it is reviewed by the SEC), creditors (and sometimes the stockholders) vote on the plan. The Bankruptcy Court confirms the plan, and the company carries out the plan by distributing the securities and other payments called for by the plan.
If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.
