Business Bankruptcy | Workouts
When To Pursue A Bankruptcy Workout
In general, if you can keep agreements between your business and its creditors out of court, it’s a good idea. Chapter 11 filings can be very costly in both time and expenses, as they often take years to complete. Alternatively, workouts can be significantly less expensive, and the savings can be used to repay creditors more quickly. In addition, workout agreements can be more creative than traditional bankruptcy proceedings. Creditors can be repaid in a variety of ways including through equity infusion, alternative financing and future cash flow.
An out-of-court workout isn’t always a viable option for distressed companies, however. Creditors must voluntarily agree to a workout, and that may not happen in some cases. Unlike Chapter 11 bankruptcy, there is no mechanism to force a creditor to accept a reorganization plan. Additionally, when given the opportunity to meet to discuss a proposed workout, creditors may decide to work together to force a company into involuntary bankruptcy. At Springer Larsen Greene, LLC, our attorneys are skilled in evaluating a company’s debt situation and choosing the most advantageous method for reorganization.
If your business is facing mounting debt and unable to dig out on its own, call us at 630-912-5871 or contact us online to discuss your options. Our firm can help you determine if business bankruptcy or a bankruptcy alternative is the appropriate solution. We offer free initial consultations to examine your company’s financial circumstances.