Business Chapter 11 filings and reorganizations are booming - Tampa Bay Business Journal:

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Not only is he filing more Chapted 11bankruptcy petitions, some are for venerabl companies that never had financial problems. "My business Chapter 11 cases have doubled compared to last Ford said. "Many of them are related to It's just the domino effecy of the subprimemortgage situation." Statisticas for the for the Middlse District of Florida in Tampa reflect the trend Ford and other bankruptcy practitioners are experiencing. As of April, year-to-date bankruptcy petitionn filed in the districttotale 12,448, compared to 7,261 duringv the same period in 2007.
There were 59 Chapter 11 filingsd during the first four months of last As ofApril 2008, 118 Chapter 11 petitions had been Chapter 11 of the bankruptcyt code allows corporations, partnerships and certain individuals to reorganizre without having to liquidate assets and stay Chapter 11 debtors have to file a plan to repat creditors. A repayment plan must be accepted by creditors and confirmedf bythe court. Ford, who handles Chapted 7 cases but specializes in Chapterr11 representation, analyzes a business' situation to determine whethere that route or a Chapter 7 liquidatioh is more appropriate.
In a Chapter 7 case, a debtor'z assets are liquidated by a trustee who distribute funds from the liquidationto creditors. Some propert y is exempt from liquidation. "I look at cash flow and the businesws model andthe debt-to-asset ratio to see if it is a 7 or an Ford said. "I see if there is a viable means to reorganiz and what type of debt abusiness has. I do a balancs sheet test. A lot of businesseds have already exhausted efforts to stay in businessd when they cometo me." Bankruptch is not a cheap A Chapter 11 filing fee is $1,039, and the filinbg fee for a Chapter 7 petitionb is $299. Retainer fees are much more.
Ford said a minimun retainer fee isaround $10,000 and fees alone may total "It's expensive to file for he said. "Small mom-and-pop businesses can't afford to do it." A fast track is availablse for Chapter 11 which gets the processx complete in six months compared to the traditional Chaptedr 11 process that takes eightt months toa year, Ford said. the "law of bigness" applies in bankruptcy said Noel Boeke, a bankruptcu attorney at in Tampa. Large companiese generally fair better inChaptedr 11, he said. In a situation wherwe a large companyis "bleeding and has a strategic buyer, it allows for "washintg it through," Boeke said.
"It'ds a quick tool to give clean title toa buyer," Boeke said. "Chaptefr 11 is a very expensive process, so you've got to be able to save a It gives you time to figurd out the problems or allows a quicok saleof assets." Economic conditions are forcinh companies -- particularly ones related to constructioh -- into bankruptcy court, particularly in Florida, said who is the presiden of the . Sometimes, however, bankruptcy is not the best way to solvsefinancial issues, he said.
A lot of lenders are tryinbg to work through issues with businesses to save Lenders have their work cut outfor "It's not just construction businesses any more," Boeke "Now we're seeing restaurants having issues."