In Nevada and California, businesses have the option to declare Chapter 7 or Chapter 11 bankruptcy. Each option comes with its own set of benefits, which vary depending on the specific circumstances of your business’s situation.
Our team of business lawyers at Flynn Giudici provides a comprehensive range of commercial bankruptcy services. Whether you're a first-time entrepreneur or an experienced business owner, we've got you covered. We understand the legal hurdles that come with filing for commercial bankruptcy in Nevada or California and are here to guide you through the process.
Ready to take the first step towards becoming debt-free and putting an end to those annoying calls from creditors? Schedule a consultation with us today to discover the benefits our commercial bankruptcy services can bring to your business. Give us a call at (775) 406-9595 or reach out to us online today.
What Is Commercial Bankruptcy?
Commercial bankruptcy enables businesses seeking debt relief to file for bankruptcy. Businesses can choose between Chapter 7 and Chapter 11. Chapter 7, also referred to as liquidation bankruptcy, is the option businesses go for when they want to close.
For many business debtors, the thought of liquidation is not their preferred option. In such cases, Chapter 11 bankruptcy provides a viable alternative. With Chapter 11, a business can keep running while it restructures its debt and implements a reorganization plan. This allows for more flexibility and better chances of recovery.
What Types of Businesses Can File for Commercial Bankruptcy in Nevada and California?
When it comes to business bankruptcy law, there are four types of businesses that can file for commercial bankruptcy:
- Partnerships: Partnerships exist as separate entities from their partners, but it's worth noting that in certain situations, the partners' personal assets might be used to settle debts in a commercial bankruptcy case or result in the partners having to file for personal bankruptcy protection. It's important to mention that partnership bankruptcies are relatively uncommon.
- LLCs: Like a partnership, a limited liability company (LLC) stands on its own, separate from its owners, who are called members. If an LLC goes bankrupt, the personal assets of the members are not at risk. However, members might lose the value of their investment in the company.
- Corporations: A corporation is a distinct entity from its owners, the stockholders. If a corporation goes bankrupt, the personal assets of the stockholders are not at risk, although they may lose the value of their investment in the company's stock. It's important to note that terms like "C-corporation" and "S-corporation" only have significance for federal taxation, and in bankruptcy law, the difference between them is usually ignored.
- Sole Proprietorships: A sole proprietorship is not legally separate from its owner. So, if a sole proprietorship goes bankrupt, it is treated as a personal bankruptcy. This means that both the business and personal assets of the owner-debtor are included.
What Is the Small Business Reorganization Act?
The Small Business Reorganization Act (SBRA) simplifies the Chapter 11 bankruptcy process, making it more affordable, faster, and less complex for small businesses.
The benefits of the SBRA include:
- Streamlining reorganization by allowing businesses to propose their own reorganization plan without requiring votes from a creditors' committee. This plan must be filed within 90 days of filing for Chapter 11.
- Delaying the deadline to pay administrative expense claims, giving businesses more time to manage their financial obligations.
- Allowing businesses to modify residential mortgages if the loan was primarily used for business purposes, providing more flexibility in managing their financial situation.
- Removing the requirement for business equity holders to provide new value in order to retain their interest without fully paying creditors.
- Allowing the court to appoint a case trustee to oversee the reorganization process, ensuring fair and efficient proceedings.
Discuss Your Situation with Our Experienced Commercial Bankruptcy Lawyers in Nevada and California Today
At Flynn Giudici, our goal is to form enduring connections with our clients. We aim to alleviate the challenges faced by business owners in Nevada and California during the commercial bankruptcy process. Our team of skilled commercial bankruptcy attorneys is dedicated to addressing the comprehensive needs of entrepreneurs and business owners, providing the personalized legal attention they require to thrive.
See How We've Helped Others Grow
"Their team is highly professional, yet not intimidating. I trust their expertise immensely."Jessica G.
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"After working with Flynn Giudici for nearly a year, we would highly recommend them for all of your legal matters."A.G.