What happens if I file Chapter 11 but cannot return to profitability, or if my creditors cannot agree on a plan of reorganization?
In order to emerge from a successful Chapter 11 Bankruptcy, the business must prepare a Chapter 11 bankruptcy plan. This reorganization plan must be approved by a committee that is appointed by the business creditors (“creditor’s committee”). If it is impossible for the business to restructure to a point that the business can become profitable, or if the creditors cannot agree on a Chapter 11 plan, then the bankruptcy can be converted to a Chapter 7 and the business assets will be liquidated. In most cases, a conversion to a Chapter 7 is worse for the creditors; therefore, they will usually do their best to ensure that the business continues operations.
In order to emerge from a successful Chapter 11 Bankruptcy, the business must prepare a Chapter 11 bankruptcy plan. This reorganization plan must be approved by a committee that is appointed by the business creditors (“creditor’s committee”). If it is impossible for the business to restructure to a point that the business can become profitable, or if the creditors cannot agree on a Chapter 11 plan, then the bankruptcy can be converted to a Chapter 7 and the business assets will be liquidated.
Related Questions
- What happens if I file Chapter 11 but cannot return to profitability, or if my creditors cannot agree on a plan of reorganization?
- What happens if I filed a joint return and have a divorce decree, or I plan to file an injured spouse claim?
- What happens after a Chapter 11 plan has been confirmed by the court?
