Pittsburgh Business Bankruptcy Finding the Right Commercial Bankruptcy Law Firm Might Save Your Business
When Your Business is in Jeopardy, You Should Rely Upon the Vast Experience of an Extraordinary Pittsburgh Bankruptcy Law Firm
Pittsburgh has a “no quit” approach to the world. Pittsburgh’s resilience is evident from its early days as powerhouse of American industry through its financial self-reinvention as a modern day center of innovation in medicine and technology. Unsurprisingly, our sports teams recognize that a game “ain’t over until it’s over” and the Pittsburgh Steelers, Pittsburgh Pirates and Pittsburgh Penguins are known for their many come from behind victories. With that in mind, it should come as no surprise bankruptcy is an option of last resort for many Pittsburgh businesses. Still, a strategic commercial bankruptcy can sometimes result in a stronger, more profitable business enterprise going forward. A business bankruptcy case does not carry the same stigma as a consumer bankruptcy case. Sophisticated business people understand that entrepreneurs often undertake considerable risk in their business ventures. Business risk involves the inherent potential for both profit and for loss. When the debts of a business become so excessive that they threaten the ability of that business to continue as a going concern, a business bankruptcy case could offer a way back to solvency.
“A strategic commercial bankruptcy can sometimes result in a stronger, more profitable business enterprise going forward.”
First, consider the affect that a bankruptcy case might have on your business in terms of reputation within your industry. Certain types of businesses suffer from the mere fact of having filed a bankruptcy case. If you think your customer base would be substantially diminished as a consequence of filing a bankruptcy case, you should weigh that against the benefits you expect from filing a bankruptcy case (a temporary 20% loss of revenue may be tolerable if it eliminates a large chunk of debt). Second, talk to your bankruptcy attorney about the benefits your company could see as a result of filing a bankruptcy case. Your bankruptcy attorney should identify issues that are likely to arise in your particular case. If your business has aggressive creditors, your bankruptcy lawyer should be able to anticipate the strategy those creditors will take in the bankruptcy case.
What Type of Business Bankruptcy Makes Sense for Your Business?
There is more than one type of commercial bankruptcy. If you expect to continue operating your business after filing your bankruptcy, you will most likely file a Chapter 11 bankruptcy case. Under Chapter 11 of the United States Bankruptcy Code, you will retain operational control over your business as a “debtor in possession.” You will be able to conduct the day to day affairs of your business and to make transactions in the ordinary course of that business. However, if you wish to undertake any transactions outside of the ordinary course of business (things like selling all of the assets of the business), your bankruptcy lawyer will need to seek the approval of the Bankruptcy Court.
Under Chapter 7 of the Bankruptcy Code, you will give up control of your business and turn over all accounts and records to a Chapter 7 Trustee who will liquidate the assets of the business for the benefit of its creditors and distribute proceeds according to the priorities set forth in the Bankruptcy Code.
Business Bankruptcy Exit Strategy
Before you file your business bankruptcy, you should know what your exit strategy will be. In most successful business bankruptcy cases, the debtor files a plan of reorganization. In order to become effective, the Bankruptcy Court must confirm the plan of reorganization and the bankruptcy disclosure statement describing it. A plan may be approved by the creditors or confirmed over the objection of creditors through a process known as “cram down.” To be confirmed, a plan must meet several tests, including that it must be fair and equitable, be in the best interest of creditors and meet all other requirements of the Bankruptcy Code.
Increase your chances of success by consulting with an experienced business bankruptcy lawyer in Pittsburgh today.