Business owners considering Chapter 11 bankruptcy are often concerned about the effect of the bankruptcy on their reputation with vendors, customers, and others. While the concern is legitimate, the reputation of a business rarely suffers because of Chapter 11, especially when the business owner gets help from an experienced Chapter 11 attorney. At Wernick Law, we help you understand the process and how to project a positive outlook to companies and individuals who do business with you.

Overall Meaning of Chapter 11

From the standpoint of the reputation of a business, an important perspective to keep in mind is that the Chapter 11 process helps a business resolve a few isolated issues and emerge leaner and meaner. The process provides the business owner with the opportunity to reorganize and restructure, while continuing to operate the business as usual. Using bankruptcy law and its protections to improve operations, organization, and structure is an admirable approach to resolving business challenges, which can engender respect from vendors, customers, and others, rather than adversely affecting reputation.

Chapter 11 enables a business to operate under the protection of the bankruptcy court and benefit from an automatic stay on collection activities, while carrying on business operations. The business owner gains the opportunity to restructure and renegotiate debts to make them more manageable. Developing the terms of the plan that ultimately drives the reorganization is the responsibility of the business, so the owner remains in control throughout the proceedings.

Filing for Chapter 11 shows that an owner is taking responsibility for their business and leveraging the bankruptcy law to save the business. Being transparent about those efforts is more likely to create trust and respect, rather than having the opposite effect.

Chapter 11 v. Chapter 7

In explaining Chapter 11 to vendors, customers, and others, it is important to remember that many people think of bankruptcy in terms of Chapter 7 proceedings, in which a business closes down and is liquidated by a trustee. Emphasizing the unique features of Chapter 11, including continuation of business operations, can make a big difference in the perception of others about the Chapter 11 bankruptcy process. Make certain that you distinguish for your customers and suppliers how Chapter 11 and Chapter 7 bankruptcies are different and dispel likely misconceptions about what is ahead for your business.

Assuring your customers and suppliers that you will remain in full control of the business throughout the proceedings can go a long way to reassuring them about the future of your business. The Chapter 11 process can protect and preserve relationships, protect the jobs of many employees, and demonstrate that you are taking responsibility for addressing the financial challenges in the business rather than ignoring them.

Importance of Legal Counsel

Chapter 11 is the most complicated type of bankruptcy. A business considering Chapter 11 bankruptcy should consult with an experienced Chapter 11 bankruptcy attorney and fully understand the process before proceeding with filing a petition. One of the issues to discuss with your attorney early on is what you can expect in terms of your business reputation, so you can build the confidence of your customers and suppliers and focus on the long-term prospects for your business even before you begin the Chapter 11 process.

At Wernick Law, we focus primarily on assisting debtors in obtaining Chapter 11 protection and achieving debt restructuring and company-wide reorganization for Florida businesses. We also represent individuals in Chapter 11 proceedings and small businesses in Chapter 11, Subchapter V cases. We apply more than 20 years of complex bankruptcy experience in providing comprehensive Chapter 11 legal services.

Our proven record of success is due to the high level of Aaron Wernick’s knowledge and skill, his steadfast dedication to protecting his clients’ interests, and his exceptional problem-solving and negotiation skills. Aaron successfully guides difficult cases to the finish line by focusing on what best serves the client and advocating for the client, while strategically and efficiently pursuing solutions that resolve disagreements and ultimately lead to confirmation of a reorganization plan.

Connect With an Experienced Florida Chapter 11 Bankruptcy Lawyer

Wernick Law welcomes Florida business owners and individuals to schedule a consultation by calling 561-961-0922 or using our contact form.