There are many ways that Chapter 11 can
help a business survive in the slow economy that we’re
experiencing at this time. One example is through restructuring of
debt. I’ve seen many companies that have come into Chapter 11, who are
over extended not because of irresponsibility on the
part of the managers, but simply because the business circumstances have
changed over the last four years perhaps there are fewer customers,
perhaps the customers cannot afford to pay what they paid in the
past for the services provided by the
business but for those reasons and other
reasons, the business can no longer
afford to pay the debt under the previous
payment structure. As with individuals, businesses have
reversals in their income. And when those reversals happen, often
times the creditors won’t work with them to make payments more
affordable. So we can take the debt in a Chapter 11 case and in some
instances we can eliminate that debt completely
so that the business can emerge unencumbered by that debt, and we can
also, eliminate the payments if the debt cannot be
completely eliminated, we can reduce
the payments the payments if the debt cannot be
completely eliminated, we can reduce
the payments to a level that makes it affordable for
this business to continue it’s operations.