Insolvency FAQs

No. The purpose of the initial consultation is to evaluate the situation and then based on an evaluation to decide if we are the appropriate counsel for the case. 

Clients have the option to be billed hourly if they so choose. It is my personal preference and often in the best interest of the client to arrange a flat fee based on the tax collection up front. By arranging a flat fee up front the client does run up fees through the process of the Chapter 11, nor do they receive additional billing until the task is complete. Consequently, finding an experienced Chapter 11 lawyer can be more cost efficient as well. 

Throughout this process I can assure you certainty of what each step will cost.  You will not receive unexpected bills or fees. 

Statistically, nationwide most Chapter 11 cases fail because they never should have been filed as a Chapter 11, but should have been filed as a Chapter 7 or liquidation. In other instances Chapter 11 cases fail because of cost. Ironically, legal fees are often the cost debtors cannot afford, reinforcing again that it is beneficial to the debtor to pay a flat fee upfront instead of accumulating additional bills and fees.  

We’ve confirmed many successful Chapter 11 plans and will not get involved unless there is a possibility of successfully restructuring the company. 

Yes. The hallmark of any creative Chapter 11 process is being able to recognize and utilize other means of reaching the goals of the client other than confirming a plan of reorganization. The sale of assets, including the sale of all - or substantially all - the assets of the company often provides an alternative to the plan confirmation process.  

It’s a common misconception that financing is neither available during a Chapter 11 case nor after the plan has been confirmed. Financing during a Chapter 11 case may be available from a variety of sources, including but not limited to the current creditors of the debtor. Additionally, it is possible to gain a super priority lien, which can prime the secured creditor position.  There are numerous individuals who will loan money to a business in Chapter 11 in hopes of gaining an ownership interest in a reconstituted debtor.  In fact, post-confirmation the reconstituted debtor is a significantly better credit risk than the pre-petition debtor. Typically, secured creditors have been restructured and unsecured creditors have been eliminated or substantially reduced. Consequently, the company is now a significantly better candidate for loans going forward. 

In the past 20 years we’ve handled cases with well over $100 million in debt and over $500 million controlling assets and the typical case ranges from $1 million to $25 million in debts or assets.