I’m going to tell you something about Chapter 11 Bankruptcy that you’ve probably never heard before.
Chapter Eleven is a gift, but not everybody qualifies for it. If you need it and qualify, you’re in luck; your business can survive as long as you follow the rules.
“The Stigma of Filing Chapter 11” refers to the negative perceptions and misconceptions commonly associated with a business declaring bankruptcy. Chapter 11, part of the U.S. Bankruptcy Code, permits companies to reorganize debts and continue operations. Filing for Chapter 11, though a financial recovery tool, often carries a few stigmas.
1. The Perception of Failure: Many people view bankruptcy as an admission of financial failure or poor management, even though it can be due to a variety of factors beyond a company’s control.
2. Your Public Image: Companies are often concerned about how bankruptcy will affect their reputation with customers, suppliers, investors, and the general public.
3. The Impact on Creditworthiness: Filing for Chapter 11 can affect a company’s ability to secure financing in the future, as lenders may view them as a higher risk.
4. Management Concerns: There is sometimes a belief that bankruptcy will lead to a loss of control for the existing management, as the reorganization plan has to be approved by creditors and the court.
5. Employee Morale and Retention: Employees may feel insecure about their job stability, which can affect morale and lead to challenges in retaining talent.
Overall, while Chapter 11 is intended as a means for a struggling company to find its footing and avoid liquidation, the stigma attached to it can create additional challenges for the business in terms of public perception and operational confidence.
Essential Rules for Surviving Chapter 11
‘Rules?’ you might ask. What are they? In short, they are: stay in business, never lie, or cheat, and do not take vacations for about a year. Do everything within your power to cut back until you’re turning a profit. ‘Cutting back to cash positive‘ is a term I’ve used for years, and it works every time. What’s the catch? There are many rules. Accounting is critical, forecasting your best efforts is crucial, consistently reducing negatives, and being aware of what is correct and possible for a total payment schedule over many years.
Building the Right Team for Turnaround Success
Without a correct team—CPA, CFO, Controller, Lawyer—there’s no chance. Think you can use people you know? Think again. No matter what your CPA, CFO, or attorney says, if they’re not qualified, you’re at a disadvantage.
How to Choose an Expert Bankruptcy Advisor
So, where can you find a team that includes all these professionals? Rettig Corporation. Period. We have no competitors. You don’t need a bank; you need correct information and people who do this every day and have for over 30 years. Join a winning team that can take you out of trouble, reorganize your company, and re-enter the marketplace cash-positive and in good order. Don’t believe me? That’s a bad idea. By the time you realize your choices were wrong, it’ll be game over: out of money, options, and time.
Making the Right Choices in Chapter 11 Bankruptcy
Do yourself a favor; after all the bad decisions so far, make one that rectifies the past and makes it all go away.
Let’s start fresh and stay on track, from now on… call me anytime.
“The most powerful tool in the free world—if you know how to use it. If not—game over.” – Patrick Rettig, Business Turnaround, Reorganization Specialist
Call me 760 662-9668
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