When a company in Oklahoma files for Chapter 11 bankruptcy, it may continue with its operations, although they may be modified to some extent. Instead of a company having to liquidate, it uses Chapter 11 bankruptcy as a way to reorganize. Companies that are still profitable but need some assistance with managing their debt typically file for Chapter 11 bankruptcy.
In most cases, when a company chooses to file for Chapter 11 bankruptcy, it can “usually keep doing business and its stock and bonds may continue to trade,” according to the U.S. Securities and Exchange Commission. After it has been established that a company qualifies to file for Chapter 11 bankruptcy and files the necessary paperwork to get the process started, a U.S. Trustee will “appoint one or more committees to represent the interests of creditors and stockholders in working with the company to develop a plan of reorganization to get out of debt.” Before the reorganization plan can be implemented, it must be approved by the court, creditors, bondholders, and stockholders.
What if creditors or stockholders reject the reorganization plan?
If the court finds that the plan is fair, it may “disregard” the creditors or stockholders’ rejection and allow the company to use it. The purpose of the reorganization plan is to relieve the company from having to repay some of its debt so that it able to “get back on its feet.”
How does filing for Chapter 11 bankruptcy protect a company?
Once a bankruptcy petition is filed, an automatic stay goes into effect. This automatic stay period represents a time when “all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim.” This period only applies to a debt or claim that arose before the filing of the bankruptcy petition.
Contact The Henson Law Firm, PLLC to Discuss Any Bankruptcy-Related Questions or Concerns
When a company begins feeling crippled by its debt, it may be time to explore what options are available to help the company gain back control so that it can continue operating and potentially become profitable again. If a company owner or even an individual is interested in filing for Chapter 11 bankruptcy but needs more information (e.g. what assets will be protected), they can contact The Henson Law Firm, PLLC to speak with an experienced Tulsa, OK bankruptcy lawyer. A bankruptcy attorney in Tulsa, OK can assess a company or individuals’ financial circumstances and determine if Chapter 11 bankruptcy is the best option for them.
The Henson Law Firm, PLLC is located at:
601 S. Boulder, Suite 600
Tulsa, OK 74119
*We are a debt relief law firm in Tulsa, Oklahoma.
*We help people file for bankruptcy relief under the Bankruptcy Code.