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Life After Chapter 11: Family Christian Stores Look to Recovery with New Plan

Posted on in Bankruptcy

Life After Chapter 11: Family Christian Stores Look to Recovery with New Plan

Filing for bankruptcy does not mean accepting personal or business failure. For many individuals and companies, bankruptcy means an opportunity to re-strategize and regain control of the company's finances. One recent example of a company emerging after bankruptcy with a new business plan is Family Christian Stores, a Grand Rapids, Michigan-based niche retailer. After completing the Chapter 11 bankruptcy process, the company's CEO plans to redefine the company's brand and better implement e-commerce into its business model.

Chapter 11 bankruptcy is a popular bankruptcy option for business owners who can not pay their business debts but want to reorganize their companies to become profitable. If you are a business owner considering filing for bankruptcy, work with an experienced bankruptcy attorney to determine all of your options and whether Chapter 11 bankruptcy is the right choice for you.

The Chapter 11 Bankruptcy Process

Chapter 11 bankruptcy is designed for businesses. Other types of bankruptcy such as Chapter 7 and Chapter 13 are meant for individuals struggling with personal debt.

When a business owner files for Chapter 11 bankruptcy, he or she voluntarily files the petition with bankruptcy court. He or she retains control of the company, but must propose a reorganization strategy to the court within four months of filing for bankruptcy. After filing for bankruptcy, the business owner must get court approval for the following business decisions:

  • Sale of business assets, including real estate and undeveloped property
  • Closing the business
  • Expanding the business
  • Any dealings with attorneys or other professionals. This can include the payment of such professionals and their retention
  • Entering business-related contracts, such as those with vendors, unions, or licensing contracts.

Additionally, creditors and shareholders have the opportunity to give their input regarding the business owner's choices for the company after he or she has filed for Chapter 11 bankruptcy.
f the court and the debtor's creditors approve of the reorganization plan, the business owner may move forward with implementing it. Otherwise, the creditors can propose their own plans or vote to change the bankruptcy to a Chapter 7. The business owner must prove that his or her plan meets the following requirements to move forward with it:

  • It must be in the creditors' best interest. Generally, this means that the creditors stand to gain at least double what they would if the business owner filed for Chapter 7 bankruptcy.
  • The plan must be proposed in good faith.
  • The plan must appear to have a good chance of success.
  • The plan must be fair and equitable.

Illinois Bankruptcy Attorneys

The decision to file for bankruptcy is not a decision to make without careful consideration. Talk to an experienced bankruptcy attorney about your options before deciding whether or not bankruptcy is the right choice for you. You might find that it is not in your best interest to file for bankruptcy. You might also find that it is the right choice for you, in which case you will need to work closely with a bankruptcy attorney through each step of the process. Contact the Law Offices of Newland & Newland, LLP to schedule your initial legal consultation with our firm today.

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