Does management have the resources and desire to engage in the reorganization process?
Bankruptcy reorganization in Chapter 11 requires significant time on the part of the owners and managers to comply with the requirements of the bankruptcy system. This option is far from inexpensive. The business must have a very viable future in order to seek this remedy. Most reorganizations fail, usually for lack of the ability to stick to a budget, or to control the events and costs that forced the company into a bankruptcy. Many times the Debtor’s owner has no real idea how much time and effort goes into a successful chapter 11.
