Perhaps the most important aspect of filing for Chapter 11 bankruptcy protection is crafting a strong, viable reorganization plan. After all, why go through the time and effort of the bankruptcy process if it is not going to fix the underlying problem? Your company needs a strong restructuring plan.
According to reporting from Business Insider, La Paloma Generating Co LLC, a California power producer, has filed for Chapter 11 bankruptcy protection. A representative from the company told reporters that the current market conditions and regulatory environment made it impossible for the natural gas plant to operate with its current debt load. The company has at least $524 million worth of outstanding debts. As such, the McKittrick based power plant will now enter Chapter 11 bankruptcy proceedings with the goal of shedding some of its burdensome financial obligations so that it can come out of bankruptcy on a more stable financial footing.
In October of 2015, the Los Angeles-based clothing brand American Apparel filed for Chapter 11 bankruptcy protection. By February 2016, the company had exited bankruptcy and was hopeful for the future. This occurred after the company got its creditors to approve its $230 million reorganization plan. The plan swapped large amounts of debt for equity. Unfortunately, less than a year later, it appears that the restructuring plan was inadequate to meet the financial challenges facing the company. According to Bloomberg news, American Apparel has once again filed for Chapter 11 protection.
According to recent media reports, Samson Resources Corp has a signed an updated reorganization agreement in hopes of exiting the Chapter 11 bankruptcy process. The oil and gas drilling company originally filed for Chapter 11 bankruptcy protection in September of 2015. However, since that time, the company has been in a battle with some of its creditors over its restructuring plan. The company hopes that its revised Chapter 11 reorganization plan will finally get approval from objecting creditors or alternatively allow it to defeat them in bankruptcy court. Once either occurs, the company will be able to move forward in the Chapter 11 process.
Chapter 11 bankruptcy is also known as a reorganization bankruptcy. This is because companies enter Chapter 11 with the goal of shedding overly restrictive obligations, restructuring their debt and emerging as a stronger and healthier business. The Chapter 11 process requires that companies come up with a realistic reorganization plan. A restructuring plan must be approved before a company can move forward with reorganization. Chapter 11 plans will only be approved if they meet all relevant legal requirements. One of the most often contested requirements is the provision that demands the equal treatment of creditors. An experienced Chapter 11 lawyer can help your company craft an effective reorganization plan that meets this legal requirement along with all others.
According to reporting from Reuters, Warren Resources, an oil and gas company, recently filed for Chapter 11 bankruptcy protection. The company, which operates heavily in California, has been hit hard by the steep decline in energy prices. Court filings indicate that Warren Resources currently has approximately $230 million in assets and $545 million in liabilities on their books. Chapter 11 bankruptcy protection will give the company an opportunity to restructure those obligations. If you think your business might need Chapter 11 reorganization, please contact an experienced California Chapter 11 bankruptcy attorney for immediate legal assistance.