Bankruptcy

What Happens to Business Contracts and Leases in Chapter 11? Chapter 11 does not automatically cancel every business contract or lease. A debtor in possession may often continue performing while deciding whether to assume, reject, or, in appropriate circumstances, assign an executory contract or unexpired lease. These decisions require attention to court approval, defaults, cure

What Happens to an SBA Loan in Chapter 11? An SBA-backed loan is not automatically erased when a business files Chapter 11. The lender’s claim, collateral rights, SBA guaranty, and any personal guarantees must be analyzed separately, and the debt may be addressed through continued payments, negotiation, sale, or a confirmed plan. The SBA Guaranty

Merchant Cash Advances vs. Loans in Bankruptcy The label on an agreement does not always determine its bankruptcy treatment. A conventional loan creates a repayment obligation, while a true merchant cash advance is structured as a purchase of future receivables; courts may examine the transaction’s economic substance. Features of a Conventional Loan Loans typically require

What Is a Section 1111(b) Election in Chapter 11? A Section 1111(b) election may allow an eligible undersecured creditor to have its entire allowed claim treated as secured for plan purposes, rather than receiving a secured claim limited to collateral value plus a separate unsecured deficiency claim. The election changes required plan treatment. Why the

What Is Section 506 Valuation in Bankruptcy? Section 506 generally treats an allowed creditor claim as secured up to the value of the creditor’s interest in estate property and unsecured for the remaining balance. Valuation can shape adequate protection, plan payments, interest, voting, and restructuring options. How a Claim Can Be Split When debt exceeds

How Does a Subchapter V Plan Get Confirmed? Direct answer: A Subchapter V plan is confirmed only after the bankruptcy court determines that the plan satisfies the Bankruptcy Code. Depending on creditor acceptance, confirmation may be consensual or may require the debtor to meet the special fair-and-equitable rules that apply in Subchapter V. Chapter 11

Can Merchant Cash Advance Debt Be Restructured in Bankruptcy? Merchant cash advance obligations may be addressed in Chapter 11 or Subchapter V, but their treatment depends on the agreement’s substance, applicable law, collateral, payment mechanics, and whether the transaction is characterized as a true receivables purchase or a loan. Why Characterization Matters An agreement labeled

What Happens to a Personal Guarantee When a Business Files Chapter 11? A Chapter 11 filing by an LLC or corporation usually does not eliminate an owner’s separate personal guarantee. The business receives the automatic stay, but a guarantor generally remains exposed unless another legal basis, court order, agreement, or separate bankruptcy provides protection. The

Chapter 11 vs. Chapter 13 for Louisiana Business Owners A corporation or LLC cannot file Chapter 13; it generally must consider Chapter 7 or Chapter 11. An individual business owner may qualify for Chapter 13 if current eligibility rules are met, while Chapter 11 may be available to individuals and business entities. Who May File

How Much Does Chapter 11 Bankruptcy Cost in Louisiana? There is no single total price for a Chapter 11 case. Costs may include filing fees, attorney and financial-professional fees, notice and administrative expenses, and—outside Subchapter V—quarterly U.S. Trustee fees. Complexity and the time needed to reach confirmation usually have the greatest effect. Court and Administrative