What is corporate reorganization and how does it affect a business partnership?

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Corporate reorganization is a process by which a company can petition the court to help it meet its debt obligations. The court will appoint professionals such as trustees and examiners to work with the company and its creditors to find a way to keep the company afloat. The main focus of corporate reorganizations is usually on preserving as many jobs as possible and maintaining a stable continuation of the company.

The trustees in charge of a corporate reorganization have very wide discretion and powers to help salvage the company. In addition, the whole reorganization process is not as transparent as many American or European business owners might expect. For example, Japanese corporate reorganization laws do not require the trustee to issue monthly operating reports to creditors as is normal in the United States.

If you have any questions regarding how a pending corporate reorganization might affect your interests, please contact our office for a legal consultation.