Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Chapter 11 is a way to reorganize the debts of the company and put it on a payment plan to pay back creditors based on the priority of their claims. Some of the creditors are paid back pennies on the dollar - usually the unsecured ones.
The moment you file a chapter 11 BK, it invokes an automatic stay and keeps your creditors at bay. This time is to be used by the BK court, the debtor, and the creditors to figure out a re-payment plan that is acceptable to all based on the current financial postion of the company.
A chapter 11 bankruptcy case may continue for many years unless the court, the U.S. trustee, the creditors committee (if one is appointed), or another party in interest acts to ensure the case's timely resolution.
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Let me clarify my question just a little How long would it take from the time we say okay to chapter 11 to take effect?For the protection that is????