As a Bankruptcy Lawyer here in Kansas City I am often being asked by potential clients “should my business be considering Chapter 11 Bankruptcy during these very difficult times?” As one who has practiced in this area of the law since the 1980’s there are several basic guidelines any business owner should use to decide whether a consultation with a bankruptcy attorney is needed, even in good economic times. Given the Pandemic and disruption to the business cycle, however, this is now a good time for many businesses to evaluate whether these factors apply to its situation today. Below are among the most important indicators of whether Chapter 11 can be of help. Is the collateral pledged by your business toward its Bank Loan now worth less than the amount owed? This is a factor in most every business Chapter 11, however, it is especially relevant now. For example, if…
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The changing economy can take its toll on businesses of all sizes. Unfortunately, weathering a changing economy can be difficult, especially for small businesses that have little room for error. Some businesses become stuck in debt and the financial stress can seem overwhelming for business owners. Struggling business owners should consider all available legal options for resolving their situation. With the right solution, you can save your business. Chapter 11 bankruptcy is an option to consider. Is Your Business in Trouble? While businesses can correct some difficult financial issues, other types of problems may be more difficult to solve without assistance. If you notice these warning signs, call an experienced Kansas City business bankruptcy attorney. Cash flow crisis Personal assets at risk Large amounts of debt Sales in decline Employee layoffs Can Chapter 11 Bankruptcy Save Your Business? Through Chapter 11 bankruptcy, you can protect your business from creditors. Consider…
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Being an entrepreneur is more difficult than many people realize. It involves hard work, an innovative streak, and many sleepless nights. Simple mistakes can overtake your best efforts and put your business in financial jeopardy. Here are a few of those mistakes and some solutions an experienced bankruptcy attorney may provide: Mismanaging Start-up Loans/ Financing Securing capital is the first step in creating a startup. Whether that capital comes from family members, friends or strangers, producing a return is expected. Not delivering on those returns could land your business in trouble with its investors and securities laws. A business workout could help avoid this conflict. This out-of-court solution may allow businesses to negotiate new terms for an investment. Failing to Make Equity Arrangements and Vesting Schedules Vesting schedules guide how business founders earn shares over time, and equity arrangements formalize the stakes each founder has in a business. Without…
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