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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I represent a small business LLC with noteholders and members.

Customer Question

I represent a small business LLC with noteholders and members. The notes are due and unpaid. One noteholder has a UCC-1 security interest filing. He is suing the LLC for payment of the note.There is a plan being circulated among the stakeholders on how the business (which has not had cashflow) could raise additional capital and begin making revenue in 4-6 months.Can the LCC file a chapter 11 reorganization so that the noteholder cannot liquidate the assets of the LLC in order to pay his past due note?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 6 years ago.
Hello,

A Chapter 11 can be used to stop a secured creditor from repossessing business property. Ultimately, the debtor must create a reorganization plan that either can be confirmed by the various creditors, or which is fair to the creditors and where at least one impaired creditor consents to the plan (aka "cramdown" reorganization).

Hope this helps.

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