If you've spent a long time building a business, you're not going to lose control over it without a fight. Some firms have been known to handle financial crises with a declaration of bankruptcy, and this can feel like an end to control over the firm's fate. But that is far from the case, especially when it buys a business valuable time to reorganize its assets.
Chapter 11 bankruptcy is far from the liquidation that some people see with a Chapter 7 declaration. A Chapter 11 filing often creates a plan for businesses to pay off their debts with a payment plan or a transfer of assets to another entity under Texas law.
A restaurant chain based in Addison has filed for Chapter 11 bankruptcy in an attempt to stay afloat. Although many of their day-to-day operations will not be affected by the declaration, many of their branches that are not performing well may not reopen.
One way that businesses can ensure they stay open during a phase such as this is to see how lenders react to it. If lenders commit to allowing debtor in possession financing, business owners and managers can have a better idea of their ability to weather bankruptcy and emerge with a stronger financial profile.
Any business owner considering Chapter 11 bankruptcy should consider help from legal representation. A lawyer can help prepare a filing as well as represent a client's interests in court during a bankruptcy hearing. An attorney may also be able to work with lenders to see if they will go along with a proposed payment plan.