If a business faces insurmountable debt, other significant financial distress, or time-consuming and financially-draining litigation, Chapter 11 bankruptcy provides a process for the business to reorganize, restructure, and reduce debt over time, while continuing operations under the protection of the bankruptcy court. The business owner can then focus on running the business, rather than on the distracting legal and debt-related financial issues. Based in Boca Raton and operating throughout the State of Florida, business bankruptcy lawyer Aaron Wernick represents clients in Chapter 11 proceedings.
Chapter 11 is the most complex, time-consuming, and costly type of bankruptcy. Navigating the complicated laws and process requires representation by a highly skilled business bankruptcy lawyer. Aaron Wernick has over 15 years of complex bankruptcy experience. He is certified in business and consumer bankruptcy law from the American Board of Certification, and is recognized by Chambers and Partners for bankruptcy and restructuring in the Florida Spotlight Guide for 2024.
Aaron has built an exceptional record of success in Chapter 11 cases, securing reorganization plan confirmation in approximately 95% of his cases. The legal profession holds Aaron in high regard as an exceptional Chapter 11 lawyer, with both judges and lawyers complimenting his skills and accomplishments. He is recognized by Chambers and Partners for bankruptcy and restructuring in the Florida Spotlight Guide for 2024 and earned Top Rated Bankruptcy Attorney status from Thomson Reuters® Super Lawyers®.
Aaron excels in Chapter 11 debtor representation due to his extensive experience and finely honed business bankruptcy skills and knowledge. His keen negotiating and problem-solving skills and his unwavering dedication to protecting his client’s interests enable Aaron to guide difficult, challenging cases to the finish line by advocating for the client, while strategically and efficiently pursuing solutions that lead to resolution of disagreements.
Throughout a Chapter 11 proceeding, Aaron and the whole team at Wernick Law provide ongoing, personalized attention to the client. Every concern is fully addressed. Every question gets a thorough response. The client is always kept informed about the status and progress in the case. Clients especially appreciate Aaron’s ability to explain complicated information in a way that is easily understood.
The provisions of Chapter 11 of the United States Bankruptcy Code, referred to as reorganization bankruptcy, provide a process for a business to obtain bankruptcy protection while remaining in possession of the business and continuing operations. The Chapter 11 process enables the business to reorganize, restructure, and reduce debt over time. Successful completion of Chapter 11 enables a business to emerge with streamlined operations and eliminate the burden of various legal issues.
The need for Chapter 11 can arise in a multitude of different ways. Overwhelming debt is often the primary cause. Businesses facing litigation in multiple jurisdictions may also benefit from Chapter 11. There are many other situations that create significant financial distress that may be alleviated through business bankruptcy under Chapter 11.
As a business bankruptcy lawyer, Aaron Wernick counsels and represents owners and key decision makers in businesses with annual revenue of at least $10 million. Any business may file for Chapter 11 protection, whether the business is a sole proprietorship, partnership, LLC, or corporation.
Small businesses engaged in commercial activity that have less than $7.5 million in total debt may benefit from a special small business bankruptcy process under Subchapter V of Chapter 11. The practice at Wernick Law includes Subchapter V bankruptcy for small businesses, as well as standard business and corporate bankruptcy under Chapter 11. The discussion that follows describes the standard Chapter 11 process.
The Chapter 11 process is detailed, complicated, and time-consuming, with specific requirements and timeframes that apply throughout the proceeding. Reorganization under a Chapter 11 plan can take up to five years, although a complex case may take longer. A much-simplified overview of the process includes these stages:
The process starts when a business files a petition for Chapter 11 bankruptcy in federal bankruptcy court. The petitioner files detailed financial and other information about the business either with the petition or within a short time thereafter. The petition is filed with the bankruptcy court in the district where the principal place of business is located, regardless of the location(s) of the petitioner’s financial obligations, including litigation.
On court acceptance of the petition as complete and in compliance with all requirements, there is an automatic stay of collections. Creditors must stop all collection and enforcement actions, including lawsuits, evictions, foreclosures, property seizures, and requests for payment. The stay lasts for the duration of the case, although a creditor may ask the court to lift the stay with respect to a specific obligation.
The business remains in possession of the business and assets during the Chapter 11 proceeding. Unlike other types of bankruptcy, the court does not appoint a trustee in most cases. The business performs all the duties of a trustee, such as accounting for property, responding to claims, and filing reports.
Reorganization Plan
The business files a proposed reorganization plan with the court within a specified time after the petition is filed. The plan must meet specific, detailed requirements and include payment proposals for all dischargeable debts. Debt discharge in Chapter 11 covers many debts, although some types of debts are not eligible for discharge. Typically, a reorganization plan provides for repayment of included debts over a period of three to five years.
The court appoints a committee of major creditors, which then meets. A representative of the business attends the meeting and answers creditors’ questions under oath.
Following the creditors’ committee meeting, creditors submit requested modifications to the plan. Extensive discussions and negotiations between the business and the creditors follow. Eventually, the business submits a modified reorganization plan to the court. The court reviews the plan and must determine that it is feasible, serves the best interests of creditors, and is not likely to be followed by another reorganization or liquidation. After the court approves the modified plan, the affected creditors vote on the plan.
If a specified percentage of the creditors approve the plan, the court confirms the reorganization plan. Following confirmation, the original debts covered by the plan are considered as discharged, with the terms of the reorganization plan taking their place.
The business must comply with all the terms in the confirmed reorganization plan. A confirmed reorganization plan functions as a contract between the debtors and creditors, with the plan governing their rights and obligations. The bankruptcy court retains jurisdiction to enforce, interpret, or aid in management of the reorganization plan.
Filing a Chapter 11 bankruptcy petition does not guarantee a successful outcome. Rather than confirming a reorganization, the bankruptcy court may dismiss the case or convert it to a Chapter 7 liquidation. Guidance from an experienced lawyer is essential to achieve a successful outcome in a business bankruptcy or corporate bankruptcy under Chapter 11. But even legal representation does not assure success.
Business bankruptcy lawyer Aaron Wernick provides meticulous attention to every detail throughout the entire process. He understands that effective problem-solving, negotiation, and collaborative compromise are critical to successfully navigating the Chapter 11 process. Aaron’s superlative business bankruptcy skills and knowledge account for his exceptional success in Chapter 11 cases.
Chapter 11 is a complex, expensive, and time-consuming process that has both advantages and disadvantages. It is imperative for any business considering Chapter 11 to conduct a thorough, detailed analysis of how the process affects the unique circumstances of their company’s operations. Aaron Wernick provides business clients with a full assessment of the considerations and consequences to help the client make a fully informed decision about whether to pursue Chapter 11 reorganization.
A Chapter 11 case may arise from many different circumstances, some of which involve other legal proceedings. In his Chapter 11 practice, Aaron Wernick handles many related legal matters as part of a reorganization bankruptcy case, such as:
Aaron also works with his clients post-bankruptcy in the area of asset protection, so that the value preserved or enhanced through the restructuring is protected going forward.
Business bankruptcy lawyer Aaron Wernick welcomes businesses and referring professionals wishing to learn more about Wernick Law’s Chapter 11 practice to schedule a consultation by calling 561-961-0922 or using the online contact form. Based in Boca Raton, Wernick Law serves clients in South Florida (including West Palm Beach, Broward County, and Miami), Southwestern Florida (including Naples and Fort Myers), Tampa, Orlando, Jacksonville, and elsewhere in the state.
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