What are the advantages of Chapter 11 bankruptcy?
The advantage of a Chapter 11 bankruptcy for a business, first and foremost, is the automatic stay. And what that is, is a law that allows a business who is under tremendous pressure from its creditors or other people that it owes money to, to pay up and that company by filing the bankruptcy stops all of those actions, any collections, actions that are being filed against them, any actions to recover assets or cash from the company, all of that stops upon filing a bankruptcy. That is key for many companies that are facing, you know, financial strain.
The Chapter 11 bankruptcy then allows that company to enter into negotiations with its creditors, it allows the company to restructure its debts as allowed by the bankruptcy code and continue its operations in a manner that will allow it to come out of a bankruptcy a stronger and better company.See all videos