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Chapter 11 Bankruptcy



Chapter 11 of the Bankruptcy Code is generally for reorganization of debts involving a corporation or partnership. Individuals with debts in excess of the Chapter 13 Bankruptcy debt limitations cited in 11 U.S.C. 109 (e) may also file a petition under Chapter 11 Bankruptcy. A Chapter 11 Bankruptcy case commences with the filing of a petition with the bankruptcy court. Most bankruptcy cases filed by the bankruptcy lawyers at Sadek Law Offices, LLC are filed in the United States Bankruptcy Court for the Eastern District of Pennsylvania located in Philadelphia, Pennsylvania.

Upon filing a petition in bankruptcy under Chapter 11 the debtor(s) automatically assumes an identity known as the “debtor in possession.” 11 U.S.C. Section 1101. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under Chapter 11 Bankruptcy. The debtor in possession may also utilize Chapter 11 Bankruptcy for the purpose of liquidation of business assets. Chapter 11 Bankruptcy imposes certain additional requirements on the debtor in possession during the reorganization process; such as reporting monthly income and operating expenses to the bankruptcy trustee and establishing new bank accounts.

Sadek Law Offices, LLC mostly files Chapter 11 Bankruptcy cases on behalf of small businesses. Whether a debtor in Chapter 11 Bankruptcy qualifies as a “small business bankruptcy” is determined by the Federal Bankruptcy Code specifically 11 U.S.C. Section 101 (51C) and requires debts due and owing of $2,000,000.00 or less and the absence of an appointment of a creditor committee.

As in Chapter 7 Bankruptcy and Chapter 13 Bankruptcy proceedings an automatic stay is invoked upon filing for Chapter 11 Bankruptcy reorganization. The automatic stay under 11 U.S.C. Section 362 (a) provides a stay of all judgments, repossession efforts and all other collection activities.

11 U.S.C. 1123 (a) (1) provides that a Chapter 11 Bankruptcy debtor file a plan which designates classes of creditor claims and treatment of such creditor claims. Generally, a Chapter 11 Bankruptcy reorganization plan will classify claim holders as secured creditors, unsecured creditors entitled to priority, general unsecured creditors and

equity security holders. After the plan is confirmed the debtor is required to make plan payments in accordance with the terms enumerated in the bankruptcy plan of reorganization. The confirmed plan creates new contractual rights which replace or supersede pre-bankruptcy filing contracts.

The Chapter 11 bankruptcy attorneys at Sadek Law Offices are here to help

Chapter 11 Bankruptcy can be complicated; however, the bankruptcy attorneys at Sadek Law Offices, LLC specialize in Bankruptcy Law, with free consultations and reviews of your financial situation to determine a Chapter 11 Bankruptcy Law strategy that will work for your company.

If you have any questions regarding Chapter 11 Bankruptcy and your legal situation, call the bankruptcy attorneys and lawyers at Sadek Law Offices, LLC. We offer a FREE and confidential consultation with one of our Chapter 11 bankruptcy attorneys in our Philadelphia law office to further discuss Chapter 11 Bankruptcy.