Chapter 11 and Business
A San Jose bankruptcy lawyer comments on Chapter 11 and Business
Filing chapter 11 bankruptcy in California is more commonly known as a reorganization bankruptcy. The court charges a $1,000 filing fee for filing Chapter 11 in California. When filing Chapter 11 in California, the petition looks almost identical to a Chapter 13 bankruptcy with the same schedules and statements. Once an individual files for Chapter 11 in California, he is then known as a ‘debtor in possession.’ Generally, the debtor, as "debtor in possession," operates the business and performs many of the functions that a trustee performs in cases under other chapters. Once the Chapter 11 is filed in California, a creditor’s committee is formed to submit their own repayment plan to propose to the court, in opposition to the debtor in possession’s plan. The debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval from the court.
What happens to the shareholders or partners when a business files Chapter 11 in California? An equity security holder is a holder of an equity security of the debtor. An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim.
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