QUESTION
If the company that I work for, a restaurant is filing Chapter 11, will they have to close the restaurant and will I lose my job?
Asked on Apr 05th, 2014 on Bankruptcy - California
14 ANSWERS
bankruptcy Attorney serving Paul, ID
at
Paul N. J. Ross Law, PLLC
Update Your Profile
In many cases, a Chapter 11 allows a business to reorganize their debts. The purpose is usually to avoid closing and laying off all employees. That is not likely the case. However, there is the occasional Chapter 11 where the plan is to liquidate, but it is much more rare than the reorganization Chapter 11.
Answered on Apr 08th, 2014 at 6:21 AM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
Update Your Profile
A Chapter 11 is normally a reorganization, and the business continues, or more accurately attempt to continue. Therefore, in the reorganization it may be necessary to cut costs and certainly all of the jobs in the enterprise are at risk.
Answered on Apr 07th, 2014 at 1:20 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
Update Your Profile
Not necessarily, Chapter 11 means that the company is trying to continue operating. Chapter 7 would mean that they are shutting down and going out of business. Of course, often companies in Chapter 11 close unprofitable parts of their business - so it's possible that your restaurant might close.
Answered on Apr 07th, 2014 at 1:20 PM
A chapter 11 typically involves a rescheduling of debt rather than a complete liquidation, so it does not necessarily mean that they are closing. Unpaid wages are given a high priority in bankruptcy anyway, so you are likely to get paid at least for the hours you have worked already.
Answered on Apr 07th, 2014 at 1:20 PM
Maybe yes and maybe no. If the only asset the company has is the restaurant, and they are filing a Chapter 11 (a business reorganization), then they are likely going to continue with the business. Otherwise, they would have filed a Chapter 7 to simply walk away from their debts (and assets, assuming they have some).
Answered on Apr 07th, 2014 at 12:13 PM
Litigation Attorney serving San Antonio, TX
at
Graves Law Firm
Update Your Profile
No, they don't have to close because of a Chapter 11 filing. In fact the major purpose of Chapter 11 is to let the debtor business stay in business. Let's hope their plan succeeds.
Answered on Apr 07th, 2014 at 12:05 PM
Debt Relief Attorney serving Anaheim, CA
Partner at
Marlin Branstetter Attorney at Law
A chapter 11 bankruptcy would allow the business to reorganize. They might close or the could remain in business while they attempt to work out a reorganization plan with their creditors. There is no guarantee that you will not lose your job.
Answered on Apr 07th, 2014 at 11:48 AM
No. Chapter 11 does not mean that they are closing. They are restructuring and taking care of their creditors.
Answered on Apr 07th, 2014 at 11:43 AM
Information provided doesn't create an attorney/client privilege nor constitute an offer of services and is only general responses to hypotheticals
2 Awards
A Chapter 11 filing normally means the company will continue to operate, continue to pay its employees, and is attempting to restructure its old debt into more manageable payments.
Answered on Apr 07th, 2014 at 11:38 AM
Most businesses that file Chapter 11 do so to restructure their debt to try to stay open. However, there is no guarantee that the chapter 11 will be successful, and I would be looking for other opportunities.
Answered on Apr 07th, 2014 at 11:35 AM
Bankruptcy Law Attorney serving Austin, TX
at
Law Office of Susan G. Taylor
Update Your Profile
No, the restaurant should remain open. The case was filed in an attempt to get creditors to settle for less.
Answered on Apr 07th, 2014 at 11:34 AM
Insurance Law Attorney serving Pasadena, CA
at
KJM Law Partners
Update Your Profile
It depends on the reorganization plan that is approved by the restaurant's creditors and confirmed by the court. The creditors may elect to keep the restaurant open as that may result in a greater amount of their debt being paid back.
Answered on Apr 07th, 2014 at 11:34 AM
Usually a Chapter 11 tries to reorganize debt to keep a company going. This is not always successful.
Answered on Apr 07th, 2014 at 11:34 AM
Complex Litigation Attorney serving Costa Mesa, CA
at
Thomas Vogele & Associates, APC
Update Your Profile
No. In a Chapter 11 the debtor operates the business and tries to work out a plan to restructure its debts so it can be successful when it comes out of bankruptcy.
Answered on Apr 07th, 2014 at 11:05 AM