NY Bankruptcy Lawyers

While it may vary depending on your case, Chapter 11 federal bankruptcy petitions in New York can cost up to $50,000 for middle market companies and larger corporations. However, even a bankruptcy filing for a small business or struggling startup can cost between $10,000 to $25,000.

Before incurring the costs and time of a formal bankruptcy, highly skilled and experienced restructuring attorneys will often successfully negotiate workouts that reorganize a company’s debt obligations out of court so that debtors can continue to operate without having their assets seized or the stigma of a bankruptcy filing in the public record. Creditors will benefit from having payment plans and schedule that the debtor can realistically satisfy, as opposed to the alternative of bankruptcy that may yield pennies on the dollar.

There is a fixed court cost of $1,167 to file a Chapter 11 bankruptcy petitions, with legal fees in tens of thousands of dollars depending on the size of your company, the complexity of the debt, and if any creditors object to the reorganization plan submitted for the Bankruptcy Court’s approval.  If you have a good relationship with your senior creditors, they may agree to pre-negotiated, pre-arranged, or pre-packaged Chapter 11 plans that can expedite the bankruptcy process and save considerable legal costs.

When you hire Warren Law Group to represent your company in a potential Chapter 11 bankruptcy filing, you are receiving highly experienced and thoughtful legal counsel who will thoroughly explore all alternatives before taking action. Filing for bankruptcy for your company is not a decision to be taken lightly, as this will greatly affect your ability to operate your current business or open a new business in the future.  Our objective will be to preserve your company and assets in a cost-efficient manner.

A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor permanently resides, or their principal place of business. A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors to compel a bankruptcy upon meeting certain requirements.

Filing for bankruptcy has many pros, but before you decide to make this critical decision you should be aware of how this affects your company’s long-term future. Some potential downsides to filing a Chapter 11 Bankruptcy include:

• Loss of privacy – Any documents you file are public record.
• Viability – The Bankruptcy Court must find a Debtor company’s reorganization plan must be viable and sustainable based on its financial condition and requires approval by creditors.
• Profitability requirements – After the approval of a Chapter 11 bankruptcy plan, debtors must be able to prove that they are able to pay back the loans given out.
• Loss of control over business – Activities such as selling, purchasing, refinancing, or leasing major capital assets will require court approval during the bankruptcy process.

Simply put, no, your company will not get you out of all debt. However, chapter 11 bankruptcy:

• Stops creditor collection efforts
• Facilitates negotiations to settle debts
• Can sometimes even allow a business to get new financing on better terms (i.e., Debtor in Possession Financing)

Declaring bankruptcy is dependent on the extent of debt and the long-term economic prospects of your come company, but some pros of declaring bankruptcy include:

• Creditors must stop collection efforts immediately, pending further order of the Bankruptcy Court.
• The business is able to continue to operate under current ownership and management but under the Supervision of the Bankruptcy Court.
• As a debtor-in-possession, the business can borrow money on better terms.
• The business can be relinquished from burdensome leases and other one-sided contracts.
• The business may be able to sell previously encumbered assets to raise capital.

Usually, the debtor remains in possession of the company, has the powers and duties of a trustee, may continue to operate its business, and may, only with Court approval, borrow new money. Then, a plan of reorganization is approved and the company can begin to unwind its bankruptcy.