Chapter 11

[anthrax]

How long can a company stay under Chapter 11?

 

[CASS]

not sure, we dont have chapter 11, i dont think

 

[Sub-Zero]

i havnt even finished chapter 1

 

[HumorMe]

How long can a company stay under Chapter 11?

This is a good question for Matt.

I think in order to file for Chapter 11 will only protect you from creditors while you devise a plan for adequate financial backing from lenders and a rescue plan in place to be able to continue doing business through the bankruptcy.

I guess it can vary in length as to what someone (company) is trying to acheive. Three to five years would be max in a Chapter 11 but could be shorter.

 

[WolfPack Charlie]

Is there a limit to how much you can owe and still file? They owed $18 million???

 

[HumorMe]

Who is "they"?

 

[WolfPack Charlie]

Shit, my bad.....Northwest Airlines....I thought this thread referred to that.

 

[HumorMe]

Shit, my bad.....Northwest Airlines....I thought this thread referred to that.

I just got home and I haven't looked at the news yet. Did they file today?

Isn't Delta going to file also in the next day or two?

 

[WolfPack Charlie]

Earlier today, I did hear that Delta was too....but I guessed they got beat to the punch!

 

[HumorMe]

Probably more will follow suit. Even after the Feds bailed out the airline industry after 9/11, it seems most of them haven't recovered or barely hanging on.

 

[HumorMe]

Matt needs to jump in on this thread and give his thoughts.

 

[anthrax]

The both filed for bankruptcy protection

So if they stay under chapter 11 for years, are the creditors screwed?
I guess some small comapnies can't wait years to recover their $

 

[WolfPack Charlie]

Sucks big nuts if some of the companies they owe are small private owned businesses who need their payment.

 

[HumorMe]

The both filed for bankruptcy protection

So if they stay under chapter 11 for years, are the creditors screwed?
I guess some small comapnies can't wait years to recover their $

The company has to come up with a restructuring plan and part of this plan is a reduction in debt owed and a timeline to repay the debts and all of the creditors owed have to vote to accept the plan.

 

[anthrax]

The company has to come up with a restructuring plan and part of this plan is a reduction in debt owed and a timeline to repay the debts and all of the creditors owed have to vote to accept the plan.

Alright but let's say you're a sm all company with little cash flow and tour unique client is US Airways
You've lost your main source of $ and they own you 6 months payment
Do you think you can wait for 5 years till they come up with their restructuration and pay you back?

 

[HumorMe]

Alright but let's say you're a sm all company with little cash flow and tour unique client is US Airways
You've lost your main source of $ and they own you 6 months payment
Do you think you can wait for 5 years till they come up with their restructuration and pay you back?

Now you are getting into territory I am not familiar with. A lot of small businesses make the mistake of catering to one company or let's one company be their main account. Not a very smart move to be set up like that.

 

[anthrax]

Now you are getting into territory I am not familiar with. A lot of small businesses make the mistake of catering to one company or let's one company be their main account. Not a very smart move to be set up like that.

Same issue with bigger companies:

Delta competitors (like American Airlines) won't have the competitive advantages to restructure that a company under Chapter 11 has