US Bankruptcy Code

US bankruptcy code chapter – 11 has a number of features and options to restructure the business of the petitioner. This chapter of the US bankruptcy code has many advantages that are discussed in detail.

Advantages :

• The chapter – 11 of the US bankruptcy law affords the petitioner to be able to reorganize and restructure his business.
• A petitioner can acquire finance and loans on favorable terms by giving it’s new creditors first priority on the business’ earnings.
• The bankruptcy court that is preciding over the case may also allow the petitioner / debtor to reject or cancel any contracts that the business has on it’s list of liabilities.
• The bankrupcy case under chapter – 11 also protects the debtors from other litigations that may turn up against the business, through the imposition of an automatic stay order. While the stay order is in place, the bankruptcy court sees to it the stay order is uplifted only when it assumes that the matter can be resolved ih the bankruptcy court, or resumed in it’s original value.
• In case, the debt’s of the petitioning business is more that it’s assets which means that the owners are left with no assets/properties at all, the chapter – 13 of the US bankruptcy court directs that the bankruptcy court overseeing the case must end the owners’ rights for the current owner’s and give the ownership of the newly organized business to the creditors.
• All creditors who have owe to the petitioner are heard by the bankruptcy court. The US bankruptcy court is ultimate deciding authority in determining whether the proposed plan of reorganization complies with the bankruptcy laws.