Business Bankruptcy

Wisconsin Business Bankruptcy Attorney

Many businesses face serious financial concerns, and sometimes, those concerns warrant consulting a business bankruptcy attorney specializing in a company’s financial distress. Financial distress takes many forms. Bankruptcy law provides legal protections for businesses and business owners facing financial difficulties.

If your company might benefit from financial solutions, discuss a possible bankruptcy, out-of-court workout, debt restructuring, receivership, reorganization, or sale process with the legal team of Swanson Sweet, LLP. We have law offices in Milwaukee, Madison, and Oshkosh, WI.

Types of Business Bankruptcy in Wisconsin

Chapter 11 bankruptcies, including small businesses or “Sub-Vs,” and Chapter 12 provide options for businesses in all sectors, farmers, fishermen, and individual owners of businesses for businesses facing financial distress in the United States. Each serves different purposes and is subject to unique requirements.

Chapter 11 Bankruptcy for Businesses and Owners

Chapter 11 bankruptcy is often referred to as “reorganization bankruptcy.” It is a more complex and involved process. Chapter 11 allows a business to continue its operations while developing a plan to restructure its debts and become financially viable. It also gives businesses the breathing room they need to sell assets or their entire business if a sale is the best method for reorganization.

Chapter 11 is available to any business entity, including corporations, partnerships, sole proprietorships, and individuals. There are no specific financial thresholds, making it a flexible option for businesses of all sizes.

Requirements for Chapter 11 Bankruptcy for Businesses

Creditor approval – to succeed in Chapter 11, the business must develop a reorganization plan that outlines how it will repay its debts, in some cases with a monthly payment plan. This plan must be approved by a majority of the business’s creditors.
Continued operations – unlike Chapter 7, which leads to the dissolution of the business, Chapter 11 allows the business to continue its operations under the supervision of the bankruptcy court.

Chapter 11 Sub-V Bankruptcy for Businesses and Owners

Chapter 11 Sub-V bankruptcy is often referred to as “small business bankruptcy.” It is a paired-down version of a full Chapter 11 and allows small business owners to continue its operations while developing a plan to restructure its debts and become financially viable, selling assets that are no longer needed to reorganize.

Requirements for Chapter 11 Sub-V Bankruptcy for Businesses.

Eligibility – Chapter 11 Sub-V is available to any business entity, including corporations, partnerships, and sole proprietorships. There is a limit on aggregate debt of 7.5 million dollars, making it an option for many smaller businesses.
Creditor approval – to succeed in Chapter 11 Sub-V, the business must develop a business reorganization plan that outlines how it will repay its debts. This plan must be approved by a majority of the business’s creditors or otherwise qualify for plan confirmation.
Continued operations – unlike Chapter 7, which leads to the dissolution of the business, Chapter 11 Sub-V allows the business to continue its operations under the supervision of the court.

Chapter 12 Bankruptcy for Farmers and Fishermen and Their Businesses

Chapter 12 bankruptcy is often referred to as “farm bankruptcy.” It is a chapter devoted to the unique operations of farm businesses and offers tax benefits only available under Chapter 12. Chapter 12 allows a farm to continue its operations while developing a plan to restructure its debts and become financially viable and/or sell assets that are no longer needed to reorganize.

Requirements for Chapter 12 Bankruptcy for Farmers and Fishermen

Eligibility – Chapter 12 is available to most farm entities, including corporations, partnerships, sole proprietorships, and individuals. There are specific limitations on total debt size of $11,097.350 for a “family farmer” and $2,268,550 for a “family fisherman.” If a farm or a family farmer’s operation exceeds these debt caps, then a Chapter 11 can be filed.
Creditor approval – to succeed in Chapter 12, the farm must develop a reorganization plan that outlines how it will repay its debts. This plan must be approved by the bankruptcy court.
Continued operations – unlike Chapter 7, which leads to the dissolution of the business, Chapter 12 allows the farm or fishing operations to continue under the supervision of the court.

Chapter 7 Bankruptcy for Businesses

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” is designed to provide an orderly liquidation of a business’s assets and a forum for litigating claims against the business. In a business context, this means that the company’s unencumbered assets are sold off, and the proceeds are distributed to creditors.

Requirements for Chapter 7 bankruptcy for businesses include the following:

Eligibility – any business entity, including corporations, partnerships, and sole proprietorships, can file for Chapter 7. However, the business must meet certain legal criteria.
Means test – if the sole proprietor’s debts are 50% or more from the business activity the means test does not apply.
Liquidation of assets – in a Chapter 7 case, a trustee is appointed to oversee the liquidation process.

Business Bankruptcy Attorneys in Wisconsin

Hiring a business bankruptcy attorney is crucial for navigating the complex legal terrain of bankruptcy proceedings. Our legal team possesses knowledge and experience in handling intricate financial matters, ensuring the best possible outcome for the business including the option to file bankruptcy.

We provide essential guidance on filing the right chapter, protecting assets, and formulating a sound strategy for debt restructuring, asset sales, and ultimately safeguarding business operations while facilitating a smoother transition through the bankruptcy process.

When selecting a business bankruptcy lawyer, it’s essential to consider experience and track records in handling similar cases. Look for a lawyer with a proven success rate, deep knowledge of bankruptcy law, and a clear understanding of your specific industry.

Our business bankruptcy attorneys have successfully provided advice to businesses across many sectors including:

Manufacturing
Automotive
Hospitality
Hotels
Restaurants
Real estate development
Inventors
Health care
Nursing homes
Assisted living
Golf courses
Country clubs

Medical practices
Dental practices
Trucking
Bicycles
Exercise and performance
Delivery
Freight
Excavators
Contractors
Builders
Unions
Private equity

Farming
Dairy
Corn
Celery
Seed growers
All crops
Custom Growers
Custom harvesters
Fisherman

Business Bankruptcy Statistics in Wisconsin

Wisconsin experiences fluctuations in business bankruptcy filings. In a recent year, there were approximately 674 business bankruptcy cases filed in the state, a notable decrease from the previous year. Factors like economic conditions, industry-specific challenges, and state and federal government bankruptcy support programs play significant roles in these statistics.

However, no matter what the statistics may be, you should never hesitate to seek professional legal help in resolving your company’s financial concerns.