If you are a Southeastern Michigan business owner, I think that you will agree that it has been, to keep it very polite, very difficult to sustain your company, retain valuable employees and still have an income for yourself and your family. In short, its been a difficult struggle. And, it is probably also true for most of you that you have amassed a mountain of debt be it general accounts payable or accrued taxes, interests and penalties and possibly accrued pension fund obligations. You might have borrowed against your personal assets, including your home, in order to stay afloat. Maybe you borrowed money from a financial institution. The SBT and MBT haven’t helped.
The most common perception, because if you are a business owner you have to be an optimist at heart, is that the economy will come roaring back and that you will be able to retire that debt, perhaps before you retire yourself and that you will be able to sell your company, transition the company to a family member or new owners and, ultimately, have some kind of retirement.
But what if the economy does not come roaring back? What if the crawl out of the current recession/depression is so slow that you cannot service your debt? What if you are facing lawsuits, judgments, tax levies and liens and loss of money and property to garnishments and executions.
How many of you have been told that after years and years of doing business with XYZ Bank that that bank has decided it no longer wants your account and is requesting immediate payment of all lines of credit and has cut off your ability to borrow? Litigation over this type of problem is now common but it takes years. What are you going to do now?
If the foregoing applies to you, your consideration of filing for protection for your business under Chapter 11 of the bankruptcy code is probably not only important but absolutely critical. If you could use available laws to assure your business’s continued existence or rebirth, aren’t those laws worth at least a look-see, if not serious consideration?
Chapter 13 may be available to address your personal situation, but Chapter 11 is the part of the bankruptcy code that is used by the “Big Guys” in bankruptcy. GM, Chrysler, Delphi and American Airlines, to name only a few, but a list of all of them would go on and on. But Chapter 11 is not just for the “Big Guys”. Its available to your company and, sometimes, to individuals in unincorporated business owners as well. After all, there is only so much you or your company are going to be able to earn and as a general rule any debt is only payable with after tax dollars.
What if you could arrange to pay off your creditors over a period of years at reasonable interest rates? What if you could reduce the mortgages on your business real estate to that real estate’s fair market value and treat the difference between the fair market value and the face amount of the debt to unsecured status? What if you could reject lease contracts and employment agreements that your company can no longer afford? What if…………………………? Chapter 11 may allow your company to do all the foregoing and more. But you will never know unless you speak with a knowledgeable attorney about your rights and how Chapter 11 will work for you. Whatever you do, do not rely on street talk, myths and rumors about bankruptcy. They are rarely accurate and some of the negatives that you may hear about will not apply to you. Each case is unique! That includes yours.
Gudeman & Associates, P.C. is available to discuss your business and your personal financial position without obligation. You can arrange your consultation with one of our attorneys at your convenience. There is no charge for your initial meeting, unless you decide to retain our firm. Our retainer fees are reasonable and customized for the facts, circumstances and legal issues presented by each case. Please call us today. The knowledge as to whether or not Chapter 11 can assist you and how it will do so is a phone call away.