Bankruptcy
Bankruptcy
When a business or organization is unable to meet its financial obligations, a bankruptcy proceeding may be the best way to restructure or eliminate debt while stabilizing operations. If a bankruptcy is the best course of action, an experienced lawyer is a must. Matt Grimshaw has nearly twenty years of experience in dealing with corporate and business entity bankruptcies.
Recently, the small business sections of Chapter 11 were amended to make it easier and less expensive for small business to reorganize. One of these changes mandates the appointment of a trustee in each small business Chapter 11 who attempts to facilitate the development of a consensual plan to restructure the small business’s debts. These trustees are appointed by the Office of the United States Trustee, a division of United States Department of Justice. Matt Grimshaw is one of four small business trustees assigned to Idaho, Montana, and the Eastern District of Washington.
Matt has extensive experience representing debtors, trustees, secured lenders, and other creditors in Chapter 7, 11, and 12 proceedings.
If you think bankruptcy will be a practical solution for your organization, start the process by booking a consultation call with Matt to discuss your best course of action.
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Frequently Asked Questions
organization, please read our frequently asked questions to learn more about what to do next.
Why are bankruptcy cases referred to by Chapters?
The Bankruptcy Code is divided in sections, or “Chapters.” The Chapter a debtor chooses is determined by the circumstances of the case and significantly affects the rights of creditors. Because bankruptcy is complex, any decision regarding bankruptcy should be made in consultation with an experienced bankruptcy lawyer.
What is a Chapter 7 bankruptcy?
In a Chapter 7 bankruptcy, a trustee is appointed to marshal and liquidate the debtor’s available assets to pay creditors. Chapter 7 is available to business entities and qualifying individuals.
What is a Chapter 11 bankruptcy?
In a Chapter 11 bankruptcy, the debtor is given an opportunity to reorganize. A Chapter 11 debtor proposes a “plan of reorganization” that explains how and when creditors will be paid. The plan is subject to numerous requirements imposed by the Bankruptcy Code and creditors vote to accept or reject it. The plan is also subject the bankruptcy court approval. In some cases, committees of creditors are organized to assist the process and can have significant power in the plan confirmation process. Occasionally, a trustee is appointed and takes over the reorganization process. The difficulty of the process varies with the debtor’s circumstances and ranges from straightforward to complex.
What is a Chapter 12 bankruptcy?
In a Chapter 12 bankruptcy, a family farmer or family fisherman can restructure its debt rather than liquidate. The farmer or fisherman proposes a plan to pay some or all of its debt over time. A Chapter 12 trustee, appointed by the Office of the United States Trustee, a division of the United States Department of Justice, assists the debtor in reorganizing, communicates with creditors, and make payments. Debt limits apply to restrict Chapter 12’s availability. To those that qualify, Chapter 12 offers distinct advantages to Chapter 11, such as a faster, less expensive resolution.
Should my business declare bankruptcy?
Bankruptcy is a complex process. In both the liquidation and reorganization process there are hidden pitfalls that a good lawyer can help you avoid. Bankruptcy is not the answer in every situation, but in the right circumstances it provide powerful tools to assist a struggling business.
Which option is best for my organization?
There is no “one size fits all” solution when it comes to bankruptcy. Each case is different and needs a unique approach and strategy.
With any option, bankruptcy is a complex legal process that will almost always require support from an experienced attorney.
Matt Grimshaw is committed to finding the best solution for each client and their unique situation.