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Will I lose part or all of my stock in a business if we file a Chapter 11 Bankruptcy?
My brother and I each own about $20,000 of stock in our business partnership. Unfortunately, we’ve incurred some rather hefty debts this past year while replacing some of our most critical machinery (to keep up with the quality of goods being manufactured by our competition). We now realize that we need more time to pay off our creditors. While we do have a fairly dependable stream of income, we’re wondering if we should file for Chapter 11 bankruptcy. My biggest concern is whether or not I will lose part or all of my stock in the business if we file under Chapter 11. Also, I’ve been told that Chapter 11 filings are more expensive than others. Are we eligible to file under a less expensive chapter?
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Answers (1)
You need to speak with a bankruptcy law attorney right away. While you’re correct that Chapter 11 filings tend to be more expensive than the others, your description of your circumstances makes it sound like that will probably be the only chapter filing that will adequately address your needs. Corporations and partnerships frequently file under Chapter 11. A bankruptcy law professional can answer all of your questions about whether you may lose any of your stock or any other assets. Since you seem to have a fully viable company, let your attorney guide you regarding how you should now move forward.
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Posted by Elizabeth Smith on 21 Jan 2010
2people found this useful
(5 Votes)