It Can Take Months to Get a Chapter 11 Plan Passed
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. So we talked about who’s a good candidate. To review, somebody who has a rational, reasonable chance of pulling out with some help. So part two, what kind of help can chapter 11 give you? Well, I think I can narrow it down to two things: breathing room and help and advice. So start with the help and advice.
As I’ve mentioned before, a chapter 11 has the most participation by your creditors by far, and also by the trustee. You are what’s called a debtor in possession. So you are running the day to day operations of your business under the authority and supervision of not only the trustee, but essentially your creditors who get to have a recognized creditor committee and work with you and have to approve eventually your chapter 11 plan.
Unlike the other chapters, it can take months sometimes even more than a year to get a chapter 11 plan passed. And that’s a reorganization plan, basically a detailed statement. Here’s how we’re going to salvage this thing. So the help and advice you’re going to have to run everything by the trustee and by your creditors.
Your trustee certainly will usually be an experienced attorney who has seen what’s worked and what hasn’t and will have, if you can be open minded and accepted, pretty good advice for you. And a lot of times your creditors will be savvy people too and attorneys that can give you suggestions you may not have thought of.
So you’re working with them. So if you’ve had narrow-minded attitudes or had trouble, myopic gaps in your thinking, you got some other people who not only could make suggestions, but can make you do things that may be good for you.
So what’s the other, the automatic stay, that’s the big power. So the automatic stay means that the creditors and everyone else that deals with your business can only go through the bankruptcy court. So if you’re like many businesses failing, instead of being attacked from 20 directions, with creditors and assets and angry customers and supply shortages in every direction, trouble. Now, everything goes through the court. You can actually stop, take stock and tackle things one at a time.
So those two powers are what will give you that opportunity. So you’re going to be working in tandem with usually experienced and savvy people. And you’re going to have the force of the court behind giving you the time to make the right decisions and start to bring things back. So hope that helps.