A paper company with a mill in Michigan has filed for Chapter 11 reorganization bankruptcy protection. The company reported that the filing will not impact its daily operations. The company noted that filing for Chapter 11 reorganization bankruptcy is intended to allow it to restructure its debt. According to a representative for the company, it intends to eliminate $2.4 billion in debt and that holders of the funded debt would receive $2.4 billion in equity.
A business reorganization under Chapter 11 of the federal bankruptcy code can be a good way for businesses to keep creditors at bay while management reorganizes and modernizes the company. Lots of companies in Michigan have emerged from Chapter 11 bankruptcy and resumed their successful ways.
Since a Chapter 11 bankruptcy is a bankruptcy strategy that is often meant to apply to businesses, there are frequent concerns that arise. These involve the debtor in possession and what that means, how the filing will affect the assets, what will happen to shareholders and how a partner might be influenced. Understanding these numerous issues can make the process easier and help people who are considering this option decide if it is the best choice for them.
Wayne County business owners are no doubt aware that Chapter 11 bankruptcy is an option for large corporations that run into financial difficulty. It seems that companies seeking Chapter 11 protection are in the news all the time. But, can small business owners take advantage of this kind of business bankruptcy too? The answer is, "yes."
Many business people in Wayne, Michigan, can consider themselves survivors of one of the worst economic periods since the Great Depression. Huge amounts of capital seemingly disappeared overnight, making things difficult even for the most able business people. As revenues slowed and business debt began to build up, lots of people were put in unenviable positions.
Readers of this blog may be familiar with the story of Family Christian Stores, the Michigan-based retailer that sought protection under Chapter 11 of the bankruptcy code. The chain has recently emerged from the business reorganization process, and its management team has plans for it to resume growth.
Michigan residents may be aware that Family Christian Stores, a Christian gift and book store, is currently working through the Chapter 11 bankruptcy process. In this newest step, the company's creditors will elect on August 7 whether to approve a proposed Chapter 11 bankruptcy plan. This election would let Family Christian Stores' creditors vote on a plan, which must be approved by 51 percent of those voting in the election and 67 percent of the amount of money represented by each vote.
When a business is struggling financially, the business may choose to file a Chapter 11 bankruptcy. In a Chapter 11, the business will be given the opportunity to reorganize while being protected from its creditors. If the bankruptcy is successfully completed, the company will have the opportunity to emerge stronger and debt free. However, before a business can get to this point, there are many complex business bankruptcy issues that must be addressed.
The bankruptcy courts exist to help people break free from their overwhelming debt. It can be a way for people to get a fresh start in their lives. However, bankruptcy can do the same thing for businesses. Chapter 11 bankruptcy, and other business bankruptcies can give businesses a fresh start after facing financial difficulties.
Michigan business owners know that expanding operations can be a good and necessary step to maintain their position in the marketplace and even grow. Conducting an expansion can be a bit of a gamble: The rewards can be big, but an expansion can also be harmful if the timing or execution isn't right. One area business seems to have had this kind of experience.