Start Liquidating chapter 11

Liquidating chapter 11

In other words, the bankruptcy trustee can block you from having control or having a say about litigation to be pursued.

The Bank is concerned over the rapidly declining value of its collateral and the diminishing availability under the Company’s borrowing base.

Basically, the only way you get bumped out is if you do things that are improper or if you grossly mismanage assets to the detriment of creditors.

However, as we’ve discussed previously, the 11 brings with it higher legal fees, and it’s a more complicated process. You might do a Chapter 11 liquidation if you have a business propped up with a lot of personal guarantees—but selling off the assets of the business wouldn’t be enough to get relief, because creditors are still pursuing you personally.

The main difference between Chapter 11 liquidation and Chapter 7 is that you, as the debtor, remain “debtor in possession.” In other words, you have control over the sale process and the distribution of assets through the bankruptcy court.

In a Chapter 7 case, by contrast, you are immediately taken out of possession, and you no longer have right title or interest to any of your assets.

Courts will also consider whether the fiduciaries that control the debtor are truly disinterested with regards to the sale – if the fiduciaries that control the debtor’s decisions in connection with the sale will directly benefit from the sale, then the court must carefully consider whether it is appropriate to defer to their business judgment.

In order to sell assets free and clear of liens, claims, and encumbrances under section 363(b) of the Bankruptcy Code, the debtor must also establish through evidence that it meets one of the five requirements under section 363(f) of the Bankruptcy Code.

The truck driver at fault had been speeding while driving way in excess of allowable hours.