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The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition.
After filing for Chapter 11, the company's stock will be delisted from the major exchanges. Common stock shareholders are last in line to recover their investments, behind bondholders and preferred shareholders. As a result, shareholders may receive pennies on the dollar, if anything at all.
To qualify for Subchapter V, a debtor must meet certain eligibility requirements. The primary criterion is that the debtor must be engaged in commercial or business activity, excluding those whose primary activity is owning single-asset real estate. Additionally, the debtor must have debts below a specific debt limit.
The person filing for bankruptcy is the one who pays for the bankruptcy, either the individual or the creditor in a forced bankruptcy.
An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor's schedules, unless it is scheduled as disputed, contingent, or unliquidated. 11 U.S.C. § 1111.
The subchapter V debtor shall file a plan not later than 90 days after the petition date, except that the court may extend the period ?if the need for the extension is attributable to circumstances for which the debtor should not justly be held accountable.? 11 U.S.C. § 1189(b).
In order to qualify for Subchapter V, a putative debtor must: (i) be a person; (ii) be engaged in commercial or business activities; and (iii) have aggregate noncontingent liquidated secured and unsecured debts of not more than $7,500,000, excluding debts owed to affiliates or insiders.
Secured creditors like banks are going to get paid first. This is because their credit is secured by assets?typically ones that your business controls. Your plan and the courts may consider how integral the assets are that secure your loans to determine which secured creditors get paid first though.