Traditional Chapter 11 is very expensive. Because of numerous complex requirements, a Traditional Chapter 11 Reorganization can take a year or more to complete, and the attorneys’ fees for handling the case for so long, and for completing the many steps of the process can exceed $100,000. Accordingly, attorneys often request an initial retainer of $25,000.
Recognizing that small family-owned businesses cannot afford such high fees, Congress has finally, and wisely, simplified the process for businesses with total debt of $2.5 million or less. The new law has many benefits for family businesses. Because there will be less time in bankruptcy, and less work for the attorneys to perform in a Small Business Case, both the initial retainer and the total cost are expected to be much more manageable.
When selecting a bankruptcy attorney, remember to investigate carefully, and chose someone familiar with chapter 11 reorganization, which is much different than typical consumer bankruptcy cases. Paul Hollender is Board-Certified in both Business and Consumer Bankruptcy and has been helping clients deal with financial difficulties, offering bankruptcy and non-bankruptcy solutions for 43 years,
If you think this new law might help you, please call (718) 442-4424 to schedule an evaluation and strategy meeting.