Chapter 11 Bankruptcy for Small Businesses

Suzzanne Uhland serves as a partner at OMelveny & Myers LLP, where she focuses on bankruptcy sales and out-of-court restructuring and reorganizing. Suzzanne Uhland has represented clients in multiple industries, including health care, technology, and retail. While Chapter 11 bankruptcy is an expensive, adn sometimes timeconsuming option, it is often the only choice available for distressed small businesses operated as a partnership, limited liability company (LLC), or corporation. Chapter 11 enables businesses to adopt a courtapproved financial restructuring that can allow for more lenient terms of payment over a longer period of time as the debtor reestablishes itself as a profitable entity. In order to appease creditors and regain profitability, small business owners may choose to sell a portion or the majority of their assets, a move that reduces debt and helps with effective downsizing. Despite the complexities and expenses associated with Chapter 11, there are a number of exemptions made for small business owners who owe less than $2.5 million in order to simplify the process.