Knoxville Chapter 11 Bankruptcy Lawyer Aids Struggling Companies
Tennessee firm guides clients through business bankruptcy reorganizations
Unless revenue is coming in, it’s nearly impossible for a business to repay substantial financial obligations. Chapter 11 bankruptcy is the solution created to give companies the ability to reorganize their debt load and operations while continuing to conduct their everyday activity. William E. Maddox, Jr. LLC, Attorney at Law in Knoxville delivers insightful advice and skillful advocacy for Tennessee businesses interested this type of relief. Having assisted a diverse group of corporations, partnerships and other types of business entities over more than a decade, I can identify creative ways to develop a reorganization framework that can win approval from creditors and put your business on the right path. Whatever led you to filing for bankruptcy, my firm is committed protecting your personal assets and making every legal effort to accomplish your goals.
How a Chapter 11 filing can help you
When filing a Chapter 11 bankruptcy, it is critical to convince the court and creditors that the business is more valuable as a continuing operation than if it were liquidated under Chapter 7, with the proceeds being split among creditors. My firm works to prepare business valuations under each scenario to support my clients’ argument and provide thorough representation to help them:
- Halt creditor actions — Even a small business might have dozens of secured and unsecured creditors. Once the petition is filed and the automatic stay is issued, the filing business is referred to as the debtor in possession and is protected against collection actions, foreclosures and service cutoffs. This helps company leaders gain a clear perspective on their situation without having to worry about measures that might prevent them from earning revenue.
- Restructure financial arrangements — As part of the bankruptcy proceeding, the debtor in possession has the ability to restructure contracts, leases and other types of obligations to enhance their ability to remain solvent once the reorganization is approved.
- Streamline internal operations — Along with revisions to financial agreements with outside parties, a Chapter 11 proposal usually includes marked changes to internal operations so that they become less expensive and more efficient.
- Secure approval from creditors — The bankruptcy trustee appoints a committee of creditors to protect the interests of unsecured creditors, shape the debtor in possession reorganization proposal and assess whether the company should be liquidated. Whatever particular concerns exist among the creditors, I will work diligently to secure their approval of the plan.
A well-drafted Chapter 11 filing includes more than financial information, but a clear outline as to how the firm can succeed going forward. By working personally with each client, I am able to increase the likelihood that a struggling business will have the time and terms it needs to recover.
Subchapter V offers more small businesses the chance to get relief
For decades, many smaller businesses had difficulty utilizing the advantages available under Chapter 11 bankruptcy. Legislation passed in 2019 improved the situation significantly and proved to be valuable during the COVID-related economic slowdown that followed. Under the Small Business Reorganization Act, Subchapter V was introduced, giving many companies the ability to create debt repayment plans that could be spread over a period lasting from three to five years. The new code also removes some procedural hurdles for businesses that might like the resources to deal with creditors’ committees. This program is limited to companies with approximately $2.7 million in debt or less. However, the pandemic led Congress to increase this maximum level, and some type of permanent revision might hike the number of companies eligible under Subchapter V.
Contact a Tennessee Chapter 11 bankruptcy attorney to set up a free consultation
William E. Maddox, Jr. LLC, Attorney at Law in Knoxville assists Tennessee businesses seeking Chapter 11 bankruptcy protection. Please call 865-293-4953 or contact me online to discuss your situation and needs in a free initial consultation.