There was recently a high-profile case of a company claiming chapter 11 bankruptcy. The Mesquite Star hotel and casino, which had been in business for 20 months, had heavy debts, and Randy Black put it into the receivership. Black also owns Mesquite’s Casablanca and Virgin River hotel-casinos just north of Las Vegas.
What is the procedure that companies have to go through in Mesquite (and anywhere else in Texas and the USA for that matter) to claim chapter 11 bankruptcy? What paperwork do you need, and what are the legal requirements that you must adhere to?
In Texas, as in many other states, a bankruptcy case begins when the owner or creditors file a petition with the bankruptcy court. This petition may be voluntary, in which case your company files it, or it may be involuntary and your creditors file the petition.
It is always preferable to start the filing yourself. This gives you more credibility in front of the court and more choice when it comes to dates and so on.
If you file the petition, you can choose to file for chapter 11 bankruptcy and become the ‘debtor in possession’. This means that you still have possession of your company and its day-to-day workings.
If you leave the filing up to your creditors, they may decide to file a chapter 7 petition instead. This means you will liquidate your assets and would lose control of your company. You can get the necessary form for filing from either legal stationery stores or www.uscourts.gov.
The Next Step in Mesquite Chapter 11 Bankruptcy Cases
The next step is to provide a written disclosure statement, and a plan of reorganization to the court. A written disclosure statement tells the court, which then tells your creditors, enough information about your business’s debts, assets and general workings for them to judge the merit of your plan of reorganization. This plan outlines what the company will do to restructure its debts and rework its business affairs to come out of the bankruptcy hearing and create a profitable business.
Do I Need to Employ an Attorney?
We know that lawyers are expensive, and nobody would use them if they were not necessary. There are many, many steps you can take before you need to file a bankruptcy petition, and we would encourage you to explore every alternative available to you before going to court. However, if you find yourself forced to file a chapter 11 bankruptcy petition, a lawyer is not legally mandatory, but failing to use one could get you into more financial trouble than you are already in. The bankruptcy code is a complex area of the law. Unless your failing business is a law firm, you will need to employ an attorney. You can find out about attorneys and business bankruptcy.
http://www.chapter11bankruptcy.biz/mesquite-chapter-11-bankruptcy.html
