Comments on: What are some consequences for filing Chapter 11 Bankruptcy? http://www.smartbankruptcyguide.com/chapter-11/what-are-some-consequences-for-filing-chapter-11-bankruptcy/ Helping you make smart bankruptcy decisions Fri, 23 Sep 2011 08:10:46 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: zeuz http://www.smartbankruptcyguide.com/chapter-11/what-are-some-consequences-for-filing-chapter-11-bankruptcy/comment-page-1/#comment-2965 zeuz Thu, 14 Jan 2010 10:29:59 +0000 http://www.smartbankruptcyguide.com/chapter-11/what-are-some-consequences-for-filing-chapter-11-bankruptcy#comment-2965 Chapter 11 reorganizes the company to pay a large portion of existing debts due to cash flow constraints under current operations. For example, an airline company may have more assets than debts, but insufficient liquidity to meet debt payments as they come due. Consequences: - Credit ratings will be downgraded - Working capital will be depleted in accordance with BK petition - BK Trustee oversight on business operations until BK is complete - Potential risk of not being able to reorganize, which could result in liquidation of company (Ch 7)<br><b>References : </b><br> Chapter 11 reorganizes the company to pay a large portion of existing debts due to cash flow constraints under current operations. For example, an airline company may have more assets than debts, but insufficient liquidity to meet debt payments as they come due.

Consequences:

- Credit ratings will be downgraded
- Working capital will be depleted in accordance with BK petition
- BK Trustee oversight on business operations until BK is complete
- Potential risk of not being able to reorganize, which could result in liquidation of company (Ch 7)
References :

]]> By: ADAMSMITH http://www.smartbankruptcyguide.com/chapter-11/what-are-some-consequences-for-filing-chapter-11-bankruptcy/comment-page-1/#comment-2964 ADAMSMITH Thu, 14 Jan 2010 10:00:59 +0000 http://www.smartbankruptcyguide.com/chapter-11/what-are-some-consequences-for-filing-chapter-11-bankruptcy#comment-2964 Mistaken estimate of market demand Inadequate planning of the business Failure to select and use appropriate outside professional advisors Inability to market product or services effectively Over dependence on a single individual or on a predicted specific event Failure to understand capital requirements of a growing business Poor timing of expenditures due to poor planning Expedient rather than reasoned decision-making<br><b>References : </b><br> Mistaken estimate of market demand
Inadequate planning of the business
Failure to select and use appropriate outside professional advisors
Inability to market product or services effectively
Over dependence on a single individual or on a predicted specific event
Failure to understand capital requirements of a growing business
Poor timing of expenditures due to poor planning
Expedient rather than reasoned decision-making
References :

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