Regional Housing & Community Services Corporation Reorganization Bankruptcy
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I chose the Regional Housing & Community Services Corporation case, the company file for a bankruptcy petition date on August 26, 2021. On October 28, 2021 the company filed for a chapter 11 bankruptcy. A chapter 11 bankruptcy is a reorganization which allows a company to try to reorganize and survive, and not become totally insolvent and liquidated. The company filed for a chapter 11 bankruptcy because the company wanted to continue the operations for the business but they just wanted to reorganized the company. In the court hearing, the company wanted to be released from all their debtors leases since the business filed for bankruptcy. With the company filing for a chapter 11 bankruptcy, the company can make changes to management, obtaining new financing (whether debt or equity) and paying liabilities that exists when the reorganization beings are all items that are included in the provisions of the reorganization plan. In the hearing, the company was approved and fully incorporated into this procedures order and the debtors are authorized to undertake any and all actions necessary or appropriate to implement to the company.
This week, I learned the difference between a liquidation (chapter 7) and reorganization (chapter 11) bankruptcy, than choosing the regional housing & community services corporation case, it helps me understand why the company file for a chapter 11 bankruptcy. Also, the regional housing & community services corporation file for chapter 11 bankruptcy because the company was not going to be able to pay off their lenders in full and let alone more junior-creditors like suppliers, no matter how long the company stay in bankruptcy proceedings.
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The Regional Housing & Community Services Corporation case gives more insight into how a company responds if it struggles with debts and does not want to wind up. Reorganization under Chapter 11 of the Bankruptcy Act helps a company develop a viable reorganization plan to help it bounce back to business (Bryan et al.,2013). Chapter 11 allows a company to continue to operate under its state with no burden of paying debts to its creditors, provided the case is in court. In case of a reorganization, the company shareholders and the employees are safe as the company will not cease to operate. However, during this time, the company may change its management structure to help it during its recovery phase and realize its restructuring plan.
Regional Housing & Community Services Corporation benefited after filing the bankruptcy case as it was...