When your business is in trouble and corporate bankruptcy is on the table you need to find advisors you can trust. Newpoint Advisors Corporation is a financial advisory firm that is dedicated to helping troubled and underperforming businesses. It’s our goal to recover debt and save jobs through expert financial advice and programming for the businesses that need it the most. This blog post will guide you through what you need to know about bankruptcy in the United States, and how our innovative TRAIL program helps your business.
Corporate Bankruptcy in the US: An Overview
Corporate Bankruptcy provides businesses in financial trouble with a solution for their debt or other financial problems. When corporations are on the verge of bankruptcy they typically are faced with two options: Chapter 11 or Chapter 7 bankruptcy. This indicates the difference between the bankruptcy process leading to financial rehabilitation or dissolution of the corporation.
The Purpose of Corporate Bankruptcy
At its core, corporate bankruptcy aims to achieve four main objectives:
- Debt Relief: Bankruptcy often begins due to overwhelming debt. It is a goal to free the company from these financial obligations. This allows the corporation to restructure its finances and become financially stable.
- Creditor Protection: With debt being a main driver for bankruptcy, it is unsurprising that the creditors are taken into consideration. In this process, the creditors can recoup at least some of the money owed through equitable distribution of assets.
- Business Continuity: Through Chapter 11 and Subchapter V bankruptcy, corporations can continue operating while they go through bankruptcy proceedings. This helps to save jobs and the economic value of the corporation.
- Maximizing Asset Value: The bankruptcy process often includes the sale of assets. This is to satisfy creditors’ claims. It therefore requires the goal of maximizing the value of these assets to achieve the best possible return.
Types of Corporate Bankruptcy
In the United States, corporate bankruptcy falls under two main chapters of the Bankruptcy Code:
Chapter 11: This form of bankruptcy is primarily used by businesses seeking to reorganize their debts and, most importantly, continue operating. The goal of Chapter 11 is to create a plan to repay creditors while maintaining the operation of the business. A streamlined process for Chapter 11 is Subchapter V bankruptcy. This process is exclusively for businesses with debts below $2.75 million. The goal of Subchapter 5 is to provide a faster relief process for eligible businesses.
Chapter 7: The distinct difference between Chapter 11 and Chapter 7 is that the goal of Chapter 7 bankruptcy is to liquidate the assets and cease operations. When all assets are liquidated, the business dissolves and any remaining debt is typically, but not always, discharged.
Navigating corporate bankruptcy can be complex and emotionally challenging for business owners. It requires careful planning and expert guidance. Working with trusted advisors can help ease the burden of corporate bankruptcy. You may need the help of a bankruptcy litigation service, like the TRAIL program.
Navigating Financial Trouble: The TRAIL Program by Newpoint Advisors Corporation
When you’re in the midst of financial stress it can be hard to see a clear path forward. Newpoint Advisors Corporation has spent more than 10 years working with struggling businesses. Because of this, we know the ins and outs of avoiding or managing corporate bankruptcy. Our TRAIL program is a series of services that creates a path to financial independence for your business.
TRAIL stands for Trustee, Receiverships, Assignee for the Benefit of Creditors, Interim Management, and Liquidations. Together, these steps help troubled businesses to recover debt and save jobs.
Trustee Services
As a trustee, Newpoint Advisors assumes a pivotal role in overseeing bankruptcy proceedings. Our job is to ensure compliance with legal requirements and advise on reorganization strategies. With our help, businesses can navigate the complexities of corporate bankruptcy with confidence, knowing they have expert guidance every step of the way.
Receiverships
In cases of business distress or default, Newpoint Advisors Corporation can step in as court-appointed receivers. We are tasked by the court with safeguarding and maximizing the value of assets. Through meticulous oversight and strategic management, our receivers work to protect the interests of stakeholders and pave the way for a smooth transition.
Assignee for the Benefit of Creditors
The Assignee for the Benefit of Creditors (ABC) process offers struggling businesses a bankruptcy alternative. Allowing for a cost-effective means of maximizing recovery for creditors. Newpoint Advisors acts as the assignee, working to identify opportunities to preserve jobs, sell assets, and achieve the highest possible returns for creditors.
Interim Management
When businesses find themselves in financial trouble, Newpoint Advisors Corporation steps in as interim management. We’re here to provide stability and strategic direction during turbulent times. With our team of industry leaders and experts, businesses can rest assured that their operations are in capable hands, allowing them to focus on charting a course toward recovery.
Liquidations
While liquidation may seem like the end of the road for troubled businesses, Newpoint Advisors Corporation sees it as an opportunity to uncover hidden value and maximize returns for stakeholders. Through our approach and extensive network of resources, we ensure that businesses receive all options and opportunities to realize the full potential of their assets, even in the face of adversity.
In times of crisis, the TRAIL program by Newpoint Advisors Corporation offers troubled businesses a lifeline toward stability and success. By leveraging our expertise in trustee services, receiverships, ABC, interim management, and liquidations, we empower business owners to navigate the complexities of corporate bankruptcy with confidence and clarity. With Newpoint Advisors Corporation by their side, businesses can embark on a journey towards brighter horizons, knowing that they have a trusted partner guiding them every step of the way.
Contact us today to learn more about how the TRAIL program can help your business navigate through troubled waters and emerge stronger than ever before.