On yesterday’s radio show (see www.thejamiekalickishow.com), I discussed the use of debt settlement techniques as an alternative to Chapter 11 bankruptcy reorganization. We’re not a Chapter 11 firm, but I have been involved in process enough to know its not very useful for small businesses. Chapter 11 seems to work great for large businesses. It seems like the airlines go through Chapter 11 every decade or so. However, the high cost and burden on management makes Chapter 11 worthless for small businesses. The best example of this is that every significant transaction must be approved by the Court. That’s efficient!
Therefore have some cases where we are using debt settlement to privately reorganize a business. We start with the most well secured, largest, and most aggressive accounts while the business gets back on its feet. Then we slowly work back to the smaller, less secured and less aggressive accounts.