Florida – December 24, 2021
Business bankruptcy proceedings are legal actions involving a business entity that is unable to repay outstanding debts, and are handled by federal courts that follow the rules of U.S. Bankruptcy Code. The bankruptcy process begins with the debtor, or a representative of creditors filing a petition with bankruptcy court in Florida. All bankruptcy cases in the United States are handled through federal courts. Any decisions in federal bankruptcy cases are made by a bankruptcy judge, including whether a debtor is eligible to file, and whether they should be discharged of their debts. Many business will work with an attorney in pursuit of a Chapter 11 bankruptcy. This type of bankruptcy action will give business owners a chance to refresh company finances. Experienced business law attorneys can assist individuals who have chosen to initiate business bankruptcy actions in Orlando which may be a precursor to a sale.
The company will need to file a petition with the court, and may be a smooth process with the assistance of a business lawyer, by paying the administrative and case filing fees. The schedules of income, debt, assets, and liabilities, along with contracts and leases must be attached to a filing for a valid review of the worth of a company and need for a bankruptcy proceeding. The company must also provide the court with a reorganization plan and how the debt will be addressed and must be approved by debtors and the court so the business can continue to function. This will enable another party to buy a business while it is in this state.
A business can buy time and reduce stress after the Chapter 11 bankruptcy paperwork is filed as it provides for an automatic stay, that will stop collection efforts against the struggling business. This gives owners and corporate boards time to assess the viability of the business, and set it up for restructure and growth, or sale without being bombarded with lawsuits, attempts at foreclosure or repossession of business property. It is best to speak with an experienced Orlando attorney to discuss options of sale for a struggling business that may go bankrupt.
Businesses often file Chapter 11 bankruptcy, so they can reorganize, while remaining in business. Filing Chapter 11 bankruptcy allows a company to create plans for profitability, cut costs, and find additional avenues to increase revenue. If a company has preferred stockholders they may still receive payments, but common stockholders will not. Repayment plans are often set up under the court’s supervision. In rare cases, individuals can also file Chapter 11 bankruptcy. Chapter 11 can be, and often is, used to accomplish the sale of the debtor’s business. Some sales are structured to transfer control of the debtor to a purchaser as part of an investment made by the purchaser under a plan of reorganization, while other sales are more typical purchases of assets. The prevailing method of sale in the United States is through an auction process. U.S. Bankruptcy Courts prefer auctions and view auction procedures as ensuring that maximum value for a debtor’s assets may be achieved. A Florida lawyer who has experience with business sales agreements can benefit a company through providing a detailed consultation and plan of action.
Seek legal counsel.
Experienced Florida business law attorneys can review bankruptcy documents, seller contracts, and focused corporate documents that will ensure a smooth sale of a business in Orlando. If your business is starting to reveal financial strain that may be helped by a restructure or sale, it is best to call a knowledgeable attorney at Legal Counsel P.A. in Orlando for assistance.
Legal Counsel, P.A.
189 S. Orange Ave., Ste. 1800
Orlando, Florida 32801