Advantages of Chapter 11


Companies that are facing seemingly insurmountable financial difficulties can often turn to chapter 11 for relief. Some of the key advantages of filing chapter 11 to successfully resolve a company’s financial woes are:

*Automatic Stay: The filing of a chapter 11 petition will, by operation of law, prohibit creditors from taking or continuing with any and all collection actions.

*Freezes Pre-Petition Debt: Upon the filing of a chapter 11 petition, the debtor is prohibited by law from making payments on its pre-petition debt, thus providing an immediate benefit to the cash flow of the business.

*Restructuring of Secured Debt: Under chapter 11, secured debt may be restructured by lowering the interest rate on the obligation, extending its maturity, or both. In certain circumstances, the amount of secured debt can be written down to the value of the creditor’s collateral.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pullman & Comley, LLC | Attorney Advertising

Written by:


Pullman & Comley, LLC on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.