Bankruptcy is a term that tends to instill images of “For Sale” or “Everything Must Go” signs posted in windows, but this often is not the case. In fact, a bankruptcy filing is one way for a business to refocus its efforts and reorganize. Indeed, throughout history, many Fortune 500 companies have at some point filed for bankruptcy, successfully reorganized and prospered. For this reason, a good bankruptcy lawyer approaches the process as a surgeon with a scalpel (rather than a sledge hammer). A company that files Chapter 11 bankruptcy will, in most cases, be a “debtor-in-possession,” and its management and board will retain control of the company so it can continue to conduct business during the pendency of its reorganization.
In order to assist employers in understanding some of the bankruptcy nuances, we have prepared this alert, which can also be found on our website, identifying some of the most important employment and employee benefit issues in US bankruptcy cases.