Chapter 11 Bankruptcy Process for Business Owners (Valuation Expert New Jersey & St. Louis)



(314) 541-8163 A podcast and video series pertaining to all things business and valuation. Chapter 11 Bankruptcy Process for Business Owners (Valuation Expert New Jersey & St. Louis)

Hi Welcome to ValuationPodcast.com – A podcast and video series about all things related to business and valuation. My name is Melissa Gragg, a company valuation expert in St. Louis Missouri.

During this episode we will discuss bankruptcy questions with Stephen White, an ESOP valuation expert and bankruptcy expert in Montclair New Jersey.

Welcome Stephen!!

1. Why believe Bankruptcy has such a stigma attached to the term?

2. What types of bankruptcy work do you encounter the most in your profession?

3. What is the difference between Chapter 7 bankruptcy and Chapter 11 bankruptcy?

4. During the reorganization process, are business owners safe from creditors during this time?

5. As a business valuator, what is your role in the bankruptcy process?

6. Chapter 11 appears to be a process that is better suited for larger companies. What about small and midsize businesses, is Chapter 11 still option?

7. Would you advise small and midsize companies to file for Chapter 11? Are there other alternatives?

8. Several companies have filed and received the Payroll Protection Plan (PPP). If a company was considering filing for bankruptcy, does this save the company if they have received PPP?

9. When a business goes through the bankruptcy process, does this mean that they will never be able to own another business?

10. Tell us more about you and your firm!

Melissa Gragg, CVA, MAFF, CDFA
Expert testimony for financial and valuation issues

melissa@bridgevaluation.com
Cell: (314) 541-8163
Bridge Valuation Partners, LLC
301 Sovereign Court, Suite 208
St. Louis, MO 63011

Stephen A White, CVA, Managing Partner
Valuation Analyst
Onyx Partners Group | stephen.white@opgbv.com
516 Bloomfield Avenue | Suite 6 | Montclair, NJ 07042
office: 973.902.7828 | cell: 973.310.2528

Chapter 7 bankruptcy. I will honestly say that’s the chapter that if you have a desire to want to continue operating a business, that’s not chapter seven. Chapter seven is you are so far in debt and that there is no way for you to grow out of that overall business. So you have to then for set up everything for, uh, uh, a forced liquidation.
And they go through that process of selling and whatever they receive that. And after they paid the administrative costs and legal associates in the year attorney’s fees, whatever’s remaining, then it goes to the creditors and then hopefully, hopefully you’ve been able to pay off everything at that point in time. Sometimes that’s not necessarily the case, but everything goes. And as I mentioned to you before, if you collateral your home and things of that nature, that falls into play as well. And some people have lost their homes because they’ve over leveraged themselves. They created too much debt for their overall business. The other side, which is chapter 11, and there are other chapters that involve, but these are two of the more primary corporate business, uh, uh, bankruptcies that we come across. Chapter 11 is a little different. What happens now is that you file a petition for chapter 11, bankruptcy and is approved. There’s three different phases that you can go through. You still may be in a process where you have a lot of debt where you have to liquidate, but it’s not a forced liquidation. This is more of an orderly liquidation. So that means then that whatever you’re selling, you can sell it, not at a deep discount, but at what, maybe at a fair market value. And in addition to that, once you go through that process and you don’t have to settle it and sell it immediately, it takes time to get the chapter 11 allows you time to sell those particular products. Another thing in that overall process is that not only are you selling those things, you’re selling at a higher value, you may actually have an opportunity to renegotiate with your creditors, where you can reduce the amount that you actually owe them.
Stephen White (08:23):
And sometimes it may even drop it down significantly because you had an opportunity to negotiate that process with them. And then of course the other side of it, the third part of this is the reorganization part. The reorganization part is, again, it’s a breathing part where you can sit down structure a plan on how you can actually get out of this. If you know that the business is not so far removed and as to being in a chapter seven, but you’re not so far removed, you can structure your business and create plan. We can get out of this, pay off your creditors and have this business continue to flourish.

source

You may also like...

Leave a Reply