If an Oklahoma company files for Chapter 11, it may be eligible for debtor in possession status. A company that obtains this status will generally be allowed to retain control over assets that creditors would otherwise have a right to liquidate. This may make it easier for a debtor to raise funds that can be used to pay off its obligations.
Creditors can still force the sale of a debtor’s assets
It’s important to note that a creditor can still ask a judge to liquidate assets owned by a company that has obtained DIP status. This may be done if a creditor believes that a firm that has just filed for bankruptcy is looking to sell its assets without authorization. A forced sale might also occur if a bankruptcy organization isn’t using assets in a manner that serves a creditor’s best interests.
Debtors may buy items back from creditors
A business owner who secures business assets with personal assets may be able to buy them back at fair market value. Let’s say that you pledged your vehicle as collateral to secure a loan to buy a truck for your business. During a Chapter 11 proceeding, it may be possible to reacquire your personal car by purchasing it from the creditor that repossessed it. This may make it easier to meet with investors or take other steps to emerge from bankruptcy as quickly as possible.
If you’re struggling to pay your business debts, it may be a good idea to file for bankruptcy. An attorney may explain the potential benefits of doing so such as retaining property, negotiating new payment terms on existing debts or gaining time to find a buyer for your firm.