The Chapter 11 reorganization plan filed by Realty Executives has been approved. The article reporting the approval includes several features common to Chapter 11 cases:
- Settlement or mediation of claims. Parties to a Chapter 11 bankruptcy case will often settle or agree to mediate their claims rather than submit them for determination by the court. In this case, the company and its former President agreed to mediate their claims.
- Rejection of leases. A Chapter 11 debtor often needs to reject leases that have become too burdensome. The article mentions rejection of four leases which Realty Executives was unable to renegotiate.
- Substantial payment. A corporation reorganizing under Chapter 11 is required to pay creditors at least what they would receive in a Chapter 7 liquidation. In many cases — particularly involving small businesses — the business will pay substantially more than the liquidation value. The article mentions that some creditors will be paid 100% and others 75% of their claims.
If you are considering requesting Chapter 11 bankruptcy protection, you should consult with an attorney familiar with Chapter 11 bankruptcies to discuss your options. For a free consultation, call (480) 719-1152.