Villa Victoria Pizzeria and the attorneys at Scura, Wigfield, Heyer, Stevens & Cammarota LLP have had the first ever Chapter 11 Subchapter V Bankruptcy filing approved by US Bankruptcy Court for the District of Jersey. This is the first approved plan of small business reorganization under the new Subchapter V Bankruptcy Code in the District of New Jersey and may be the first in the nation. This is a colossal first step forward in protecting and aiding small businesses.
Liens can be a complicated problem for many individuals dealing with heavy debt issues. A lien is a claim or legal right against assets, most often property or real estate, which are utilized as collateral. Pay the lien, and you reclaim all rights to your possessions and settle your debts. However, if you fail to pay off your liens, the organization that filed said debt can then repossess your property, auction it off, and collect on the income to pay off the debt.
The most beneficial protection provided to individuals and corporate entities filing during bankruptcy proceedings is the “automatic stay”. The automatic stay is immediately invoked upon the filing of a bankruptcy petition and prevents any creditor from taking actions to collect a pre-petition debt. This article will explore whether any other individual or corporate entity also obligated to the same debt (also know as a “co-debtor”) is protected by the automatic stay, even if they did not seek bankruptcy relief.
Every day new companies open their doors, employ a workforce, and provide valuable services and products to help sustain our economy. Clearly, not all businesses are successful, particularly small businesses. Most businesses in operation in the United States are defined as a small business, which the U.S. Small Business Administration defines as an independent business having fewer than 500 employees. Small businesses, which each are commonly undercapitalized and lacking the necessary skills to operate a business, are particularly vulnerable to the incumbent risks that all businesses face. Only about half of small businesses will survive past the five-year mark. So, what does a business owner do when the business no longer can pay its debts as they come do?
Dealing with any type of financial challenges could be overwhelming, emotional and in some cases, embarrassing. With regards to business debt, our firm understands that business owners in New Jersey might find it difficult to navigate complex financial matters regarding their business. For many, they seek to understand the best way to keep their business operating, but in some matters, business owners should note that some debt relief options might result in the sale or liquidation of their business.
Whether it is a small business or large corporation, dealing with financial challenges can sometimes be debilitating. The steps required and the debt relief options can be very complex, and those considering business bankruptcy should become knowledgeable about the process.
For a business to bring itself through a bankruptcy and end up as a reorganized debtor with a confirmed plan of reorganization is a great achievement. Confirmation can only be accomplished with foresight, planning, and of course, a team of professionals to help guide the way. In obtaining the creditor buy-in necessary to confirm a chapter 11 plan, the business debtor must understand and explain the issues that caused it to require bankruptcy protection and be able to explain why those issues will no longer plague the reorganized company. It must provide an analysis of projected cash-flows and convince creditors that the obligations promised in the plan of reorganization can be met.
If you own a business and are facing financial difficulty, you may be considering a chapter 11 bankruptcy thinking that it can fix your business’s financial woes. However, many people underestimate the difficulty of completing the chapter 11 process through confirmation of a chapter 11 plan. Filing a chapter 11 bankruptcy to attempt to save a business with no prospect of reorganization will just be wasting more money only to prolong the inevitable. This blog will evaluate factors to look for at the outset of contemplation of bankruptcy and guide your decision as to whether to attempt a reorganization or to liquidate the company.
The unfortunate reality for business owners in New Jersey and elsewhere is that a business could encounter a rough patch. This can occur regardless of when and if the business was flourishing because business debt can cause a business to suddenly suffer. When a business hits a rough patch, declaring bankruptcy might seem like the only option. While it might end up being the best option for the hurting business, it is important to consider what alternatives are available to obtain realistic debt relief.
When a business is faced with financial challenges, it might also find it challenging to stay in operation. No matter the size of the company, when business debt becomes too much to handle, it might be necessary to consider what debt relief options are available. While it might currently be difficult to get through the day-to-day operations with growing business debt, there are ways New Jersey companies can keep the business running while also seeking debt relief.
When a business petitions for bankruptcy, the business often requires the use of property that is subject to a creditor's lien. For example, a business that has accounts receivable may need the payments coming into the business from the accounts receivable in order to continue to operate. These matters are routinely resolved in the first few days of a bankruptcy case by the business paying the creditor for the continued use of the secured property and by giving the creditor a replacement lien on any new property that is an offspring from the used-up property.