Massachusetts Chapter 11 Business Bankruptcy
The Massachusetts Business Bankruptcy lawyers at Grantham | Cencarik, PC have years of experience assisting Massachusetts businesses with their debt problems. We represent business clients in Boston, Cambridge, Danvers, Plymouth, and throughout Eastern Massachusetts.
What is Chapter 11 Bankruptcy?
A Massachusetts Chapter 11 Bankruptcy is a reorganization proceeding. A business in financial trouble may elect to file a Chapter 11 petition to try to reorganize outstanding debts and continue to operate the business. There is an automatic stay, just like any other bankruptcy proceeding. Unlike in a Chapter 7 proceeding, a business that files a Chapter 11 proceeding will become a debtor-in-possession and there will initially be no trustee appointed. The debtor-in-possession is given an opportunity to prepare a plan of reorganization that must be approved by a majority of the creditors. If a plan is approved by the creditors and is confirmed by the court, it binds both the debtor and the creditors to its terms of repayment. Under the plan, the debtor-in-possession can reduce debts by repaying a portion of its obligations and discharging others. It can also terminate burdensome contracts and leases, recover assets, and rescale operations to get back to profitability. Under this Chapter, a business normally goes through a consolidation period and comes away with a reduced debt load. Plans can call for repayment out of future profits, sales of some or all of the assets, or a merger or recapitalization. Generally, the plan of reorganization must provide for paying creditors at least as much as they would have been entitled to be paid in a Chapter 7 liquidation proceeding.
The Debtor in Possession
In a Chapter 11 Bankruptcy, typically, the owners and managers of the business are entitled to continue to operate the business. They become a "debtor in possession" or "DIP". The DIP runs the day to day operations of the business with the protection of the Bankruptcy Court. With the assistance of their attorney, the business will prepare a plan or reorganization that outlines how debts and obligations are to be restructured to allow for the business to continue to operate and return to profitability.
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Massachusetts Lawyer
(617) 497-7141
Due to the complexity of business bankruptcy cases, it is important that you contact us to schedule an in office meeting. The initial telephone call is free; however, you may be required to pay a small deposit to cover the in-office consultation. During this consultation we will review certain financial records and will be prepared to offer recommendations immediately. This gives you an opportunity to meet, or speak with the attorney that will be working with you on your matter.
The Boston Massachusetts business lawyers at Grantham | Cencarik, PC operate as a debt relief agency located in Cambridge and serving clients in Boston and eastern Massachusetts, including Cambridge, Braintree, Somerville, Revere, Brockton, Chelsea, Peabody, Quincy, Saugus, Winthrop, and the following counties: Essex, Middlesex, Norfolk, Plymouth, and Suffolk.