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Small Business Bankruptcy Toolkit
Practical Law Toolkit w-022-8291 (Approx. 11 pages)
Small Business Bankruptcy Toolkit
by Practical Law Bankruptcy & Restructuring
| Maintained • USA (National/Federal) |
Resources designed to assist small businesses and their counsel in understanding and preparing a bankruptcy case, alternative restructuring, or liquidation options.
Small businesses feel the effects of financial distress earlier than large corporations and are often affected the most by an economic downturn or fiscal changes. Types of small businesses include:
- Family-owned businesses.
- Entrepreneurial ventures.
- Individual consulting and personal services.
- Start-up companies.
Small businesses often try to avoid filing a Chapter 11 bankruptcy case because it can be expensive, risky, time-consuming, and complex (see Practice Note, Bankruptcy: Overview of the Chapter 11 Process). However, financially distressed small businesses have a variety of restructuring or liquidation options, both in and out of court, that can accomplish many of the same things that are effected in a typical Chapter 11 bankruptcy proceeding, though sometimes in a simpler and more efficient manner.
Small businesses have a range of options to consider, including:
- Small business case Chapter 11.
- Subchapter V of Chapter 11.
- Liquidation under Chapter 11.
- Liquidation under Chapter 7.
- Dissolution and winding up.
- Non-bankruptcy alternatives, including assignments for the benefits of creditor and debt restructurings.
This Toolkit contains continuously maintained practice notes, standard documents, and checklists to help small businesses understand their restructuring and liquidation options.
For additional resources that relate specifically to a small business debtor under Subchapter V of Chapter 11, see Subchapter V of Chapter 11 Bankruptcy Toolkit.