Considering the state of the economy, it’s important now more than ever to understand bankruptcy. To brush up on the basics, check out BusinessWeek’s “Bankruptcy 101.” The article provides details about Chapter 11—which may let you reorganize your company while shielding you from creditors and discharging unsustainable debt—and what you will need to be able to file a petition for Chapter 11, including:
Debtor-in-possession (DIP) financing. For this, your bank will renegotiate an older, secured loan on new terms or a new bank may agree to take on a renegotiated loan from the previous bank, and potentially extend more financing.
A reorganization plan. You should be preparing to file a petition in your local bankruptcy court, describing your reorganization plan. The plan needs to include an itemization of your business assets and liabilities; information about business equipment you own, commercial property you own or lease, and bank balances; figures for employees' wages plus the cost of any retirement and health insurance plans; specifics regarding all your secured and unsecured creditors, and how much each is owed.
For more information, read the full article.
Source:
BusinessWeek: Bankruptcy 101
