Business is about taking risks. Sometimes you win; sometimes you lose. The community wants people to associate together and take business risks; that is why states provide for the formation of corporations and other limited liability entities. Workers in groups can do big things. On the other hand, we don’t want a free-for-all when the chips are down. We don’t want a first to sue mentality in the business world. That is why we allow for business bankruptcies. There are two types – liquidation, where recovery is hopeless– and reorganization — where if we can maintain order, we might just recover from the downturn.

If your business in trouble, you should get advice from objective outsiders who can evaluate your chances more clearly that you might. If you are worn out, tired of the rat race and the headache of debt, you might give up too easily. On the other hand, if you are married to your business and clinging desperately when you should let go, you may just be wasting time and energy?  Call some of the attorneys and advisors listed in these posts for an objective opinion about your situation! Take back control of your life and have peace of mind!

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com

Before filing for bankruptcy you may want to consider alternatives. Consulting with a lawyer is recommended in order to avoid overlooking important details and to ensure things are done the correct way.

Some alternatives may be:
Negotiate with creditors: Open communication with your creditors and negotiate to lower interest rates, extend payment terms, or create a repayment plan that fits your financial situation.

Debt consolidation: Consolidate your debts into one loan with a lower interest rate. This can help simplify your payments and potentially save you money in the long run.

Debt settlement: Work with a debt settlement company or negotiate directly with your creditors to settle your debts for less than the full amount owed. This can help reduce your overall debt burden.

Credit counseling: Seek the assistance of a non-profit credit counseling agency. They can provide you with financial education, create a budget, and help develop a debt management plan.

Debt management plan: Enroll in a debt management plan offered by a credit counseling agency. They will negotiate with your creditors to lower interest rates and potentially waive fees, allowing you to repay your debts over a set period of time.

Liquidate assets: Consider selling non-essential assets to generate funds to pay off your debts. This can help you avoid bankruptcy by using the proceeds to settle your outstanding obligations.

Loan restructuring: Contact your lenders and inquire about the possibility of restructuring your loans. They may be willing to modify the terms of your loans to make payments more manageable.

Earn additional income: Increasing your income through additional work or a side business can help you tackle your debts more effectively.

Budgeting and reducing expenses: Take a hard look at your expenses and identify where you can cut back. Develop a strict budget to allocate your income towards paying off debts.

Legal options: Consult with an attorney who specializes in debt law to explore any potential legal alternatives to bankruptcy that may be available to you.

It’s important to remember that the best alternative to bankruptcy may vary depending on your specific financial situation. Consulting with an attorney to evaluate your options can provide valuable guidance.

Learn about the reasons you may want a Bankruptcy Lawyer

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com

Has the Panicdemic got your business shut down? Don’t forget that some commercial insurance covers business interruption and some policies may not be limited to physical damage causes. Read your business insurance policy carefully!

For advice or help reading your policy visit:

Heuser Law Office

Hirsh and Heuser Attorneys

Louisville Law Clinic

Louisville Business Clinic

Or contact us to discuss bankruptcy options.

in March (2020), a Bankruptcy Court in Michigan allowed a debtor, who had filed for bankruptcy before the Small Business Reorganization Act of 2019 (SBRA) amendments, to proceed under Subchapter V of chapter 11. The judge’s opinion joins a growing set of decisions that hold that cases that are already proceeding in a “traditional” chapter 11 may elect to switch and proceed under the SBRA instead.

Vincent F. Heuser, Jr.
Hirsh and Heuser Attorneys
3600 Goldsmith Lane
Louisville, KY 40220
(502) 458-5879
http://www.hirshandheuser.com

*DRAFT*
Small Business Reorganization Act
Subchapter V of Chapter 11 Amendments
For a period of one year from February, 2020, the CARES Act allows more small businesses to qualify as a debtor under the small business reorganization provisions of chapter 11 recently added by the SBRA.
The Bankruptcy Code provides special rules and procedures for “small business debtors.” See 11 U.S.C. §101(51D). Congress recently found that “small business chapter 11 cases continue to encounter difficulty in successfully reorganizing.” H.R. Rep. No. 116-171, at 4 (2019). Because of this, Congress enacted the SBRA (11 U.S.C. §1181 et seq.), which was signed by President Trump in August 2019 and became effective on February 19, 2020. The goal is to streamline small business bankruptcies, establish an expedited schedule for reorganization, reduce legal expenses, and provide more debtor friendly plan requirements and confirmation standards.
Previously, to qualify as a “small business debtor,” a business must have had non-contingent, liquidated debts (secured and unsecured) totaling not more than $2,725,625. (11 U.S.C. § 1182(1) and 11 U.S.C. §101(51D). The CARES Act modifies the SBRA by raising the threshold to $7.5 million in debts, excluding insider and affiliate debt, but this section has a sunset provision such that one year from enactment, the amendment expires and the $2,725,625 threshold is reinstated. No affiliate of a public company is eligible pursuant to amended SBRA.
Struggling businesses may want to file for Chapter 11 now to take advantage of the SBRA’s more friendly procedures. Some of the key provisions include:
• The United States Trustee will be required to appoint a trustee in every small business chapter 11 case. The trustee will have a role in assisting the debtor in developing a plan of reorganization, and will be responsible for disbursing payments under a plan. However, the trustee will serve in a mostly supervisory role and will not generally be involved in any operational aspects of the business. See 11 U.S.C. §§ 1183-1184. In this sense, the SBRA preserves the notion of a “debtor in possession” in small business cases.
• An unsecured creditors’ committee will not be appointed unless ordered by the court for cause. See 11 U.S.C. § 1102(a)(3).
• A status conference must be held within 60 days of the date of the petition to determine how best to proceed with the case. The date of the status conference may be extended if cause is demonstrated. See 11 U.S.C. § 1188(a).
• A plan of reorganization must be filed within 90 days of the petition date, although the court can extend the deadline if circumstances outside the control of the debtor merit an extension. Only a debtor may file a plan, and no disclosure statement is required. However, a plan must contain some information, such as a liquidation analysis and a projection of a debtor’s ability to make payments under the plan, traditionally associated with a disclosure statement. See 11 U.S.C. § 1189.
• A plan may modify the rights of a secured lender with a lien on the principal residence of the debtor if the “new value” received from the loan was not used primarily to acquire the residence and was used primarily in connection with the small business. See 11 U.S.C. § 1190. Modification of such a loan is otherwise prohibited in chapter 11 cases. See 11 U.S.C. § 1123(b)(5).
• The SBRA makes it easier for a debtor to confirm a plan and maintain ownership of its business. In a typical chapter 11 case, the “absolute priority rule” ensures that owners cannot retain equity in a business unless creditors are paid in full by the chapter 11 plan. The SBRA abrogates this rule and provides that existing owners of a business may retain their full ownership without providing any “new value,” but only if the plan provides for the debtor to distribute all of its projected disposable income over at least three years and no more than five from the date the first payment is due under the plan. See 11 U.S.C. § 1191.
• In a regular Chapter 11, the debtor must pay admin expense claims on the effective date of the plan. Under the SBRA, a small business debtor may stretch payment of administrative expense claims out over the term of the plan. See 11 U.S.C. § 1191(e).
• Under the SBRA, a discharge is not granted until the debtor completes all payments due within the first three years of the plan or a longer period not to exceed five years as the court determines. The discharge applies to all debts addressed by the plan except for debts on which the last payment is due after the term of the plan or which are non-dischargeable. See 11 U.S.C. § 1192.

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com

*DRAFT*
Filing bankruptcy doesn’t necessarily mean curtains for a company. Chapter 11 bankruptcy allows companies to revamp in order to again become successful. With the right restructuring strategy, companies can overcome and re-emerged from bankruptcy more profitable than they ever were before.

2001 – Imperial Sugar

2005 – Delta Air Lines

2009 – Six Flags

2009 – General Motors

2011 – American Airlines

2012 – Hostess

2012 – Kodak

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com

*DRAFT*
bankruptcy doesn’t have to mean the end of your business. if you file a chapter 11 you can reorganize and get back on your feet. just be sure to remember a few simple rules and you will be recovered in no time.

1. Keep everything honest don’t hide assets.
2. Don’t be discouraged by any past failures learn from your mistakes
3. Take advantage of local resources look to the local chambers of commerce to learn about programs
4. Preparation make sure you have a business plan early on
5. your employees are critical assets take care of your employees and they will take care of your customers
6. Persevere solve problems don’t quit
7. Keep your business affairs separate from your personal life
8. make good use of experienced legal professionals and CPA’s.

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com

*DRAFT*
This is how it works, folks.

When a business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either Chapter 7 or Chapter 11.

In Chapter 7, the business ceases operations, a trustee sells all of its assets, and then distributes the proceeds to its creditors. Any residual amount is returned to the owners of the company.

In Chapter 11, in most instances the debtor remains in control of its business operations as a “debtor in possession”, and is subject to the oversight and jurisdiction of the court.

A Chapter 11 bankruptcy will result in one of three outcomes for the debtor: reorganization, conversion to Chapter 7 bankruptcy, or dismissal. In order for a chapter 11 debtor to reorganize, the debtor must file (and the court must confirm) a plan of reorganization. In effect, the plan is a compromise between the major stakeholders in the case, including the debtor and its creditors. Most chapter 11 cases aim to confirm a plan, but that may not always be possible.

If the judge approves the reorganization plan and the creditors all agree, then the plan can be confirmed. Section 1129 of the Bankruptcy Code requires the bankruptcy court reach certain conclusions prior to confirming or approving the plan and making it binding on all parties in the case, most notably that the plan complies with applicable law and was proposed in good faith. The court must also find that the reorganization plan is feasible in that, unless the plan provides otherwise, the plan is not likely to be followed by further reorganization or liquidation.

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879
https://heuserlawoffice.com