01
Case Strategy & First-Day Motions
Pre-filing planning and the first-day relief on cash management, wages, vendors, and utilities that keeps a business running on day one, so operations do not seize up the moment the petition is filed.
Restructuring & Insolvency
Chapter 11 Reorganizations
A controlled path through US bankruptcy for a business worth more reorganized than wound up. The automatic stay, debtor-in-possession financing, and a confirmable plan, run partner-first from the first-day motions to emergence.
A Chapter 11 petition buys time, and the Code counts it out. The debtor alone may file a plan for the first 120 days, a period the court can extend to eighteen months and no further. Leases of stores and offices must be assumed or rejected within 120 days, with one 90-day extension and nothing more without the landlord's consent, so a retailer learns within seven months which locations survive. Utilities may cut service unless given adequate assurance of payment within thirty days.
Confirmation turns on two counts and a valuation. A class accepts when creditors holding two thirds in amount and more than half in number of the claims voted say yes, and at least one impaired class must accept, insiders excluded, before the court may cram the plan down on the rest. Everything after that is argument over what the business is worth, because the fair-and-equitable rule pays each class in order of priority out of that one number.
We act for debtors or creditors in a given case, never both, and have represented clients in matters before the SEC, the CFTC and the IRS.
What we do
Chapter 11 representation across the life of a case, from the petition and first-day motions to a confirmed plan or a court-approved sale.
02
Debtor-in-Possession Financing
Negotiating and documenting DIP facilities, with their priority, liens, budgets, covenants, and milestones, and the cash-collateral arrangements that fund the company through the case while the reorganization takes shape.
03
The Automatic Stay & Adequate Protection
Enforcing the stay against collection and enforcement, and litigating the relief-from-stay and adequate-protection motions that secured creditors bring early to test the debtor's hold on its collateral.
04
Plans of Reorganization & Confirmation
Building a confirmable plan through classification, treatment, the disclosure statement, the solicitation and vote, and the confirmation hearing, including cramdown over a dissenting class where the numbers support it.
05
363 Sales & Bidding Procedures
Selling a business or its assets free and clear under Section 363, with stalking-horse bids, bidding procedures, court-supervised auctions, and sale orders, when the enterprise is worth more sold than reorganized.
06
Creditor & Committee Representation
Representing lenders, bondholders, funds, landlords, and official committees in Chapter 11, protecting recovery, shaping plan treatment, and pressing valuation and classification where the value really breaks.
What you should know
What decides how a Chapter 11 case actually goes.
01
Interim today, final in fourteen days
The interim DIP order is heard within a day or two of filing, the final order no sooner than fourteen days after the motion is served. Whatever the interim order grants, a roll-up of prepetition debt, a priming lien or case milestones, is the baseline the committee inherits, so the fight is on day one.
02
A lift-stay motion runs on a thirty-day fuse
Unless the court continues the stay within thirty days of a secured creditor's request, it ends by operation of law. The grounds are cause, including collateral losing value without adequate protection, or no equity in property the debtor does not need to reorganize. The adequate-protection payments that settle the motion are rent on the equipment.
03
Old equity pays to stay
A dissenting class of unsecured creditors can be crammed down only if no junior class, the owners included, receives anything on account of its old interest. Owners who want to keep the company contribute new money, and the court asks whether it is new, substantial and necessary, and whether anyone could bid for the equity.
04
A sale skips the vote
A 363 sale needs no disclosure statement or creditor ballot, only an order after notice, and transfers assets free of a lien on one of five statutory grounds, most often the lienholder's consent or a price above the liens. The lender may credit-bid its debt, and the order's good-faith finding shields the sale on appeal.
05
Property here is enough to file here
A company needs only property in the United States to file under Chapter 11, and courts have accepted a retainer in a US bank account. The order binds nobody abroad until recognized, by application in the sixty or so countries that have adopted the UNCITRAL model law, and in some not at all.
06
Duties do not shift, standing does
In Delaware a board's duties run to the corporation as insolvency approaches; once it is insolvent, creditors gain standing to bring derivative claims shareholders could. Transfers in the two years before filing can be avoided as fraudulent under the Code, four years under most state statutes, so the minutes say why each payment was made.
The arc of a case
How this work runs
From petition day to the effective date.
- Stage 01
Before the petition
Weeks before filing, the case is quietly built: a 13-week cash-flow forecast, board minutes that document disinterested judgment, DIP term sheets negotiated in parallel, and, where the creditor math allows, a restructuring support agreement that locks key lenders to the plan before the court ever sees it.
- Stage 02
First-day stabilization
The petition drops, the automatic stay takes hold, and within hours the court hears first-day motions: interim DIP approval, cash collateral, wages, critical vendors, utilities. The objective is narrow. Payroll clears, shelves stay stocked, and no counterparty has a reason to walk.
- Stage 03
The middle game
Under exclusivity, the debtor negotiates the capital structure it will exit with: claims are reconciled, leases assumed or rejected under Section 365, avoidance exposure mapped, and valuation fought. A 363 sale track often runs alongside the plan, both as pressure on holdouts and as insurance.
- Stage 04
Confirmation and exit
The disclosure statement is approved, impaired classes vote, and confirmation is tried on feasibility, best interests, and cramdown where a class holds out. On the effective date the plan binds every creditor, exit financing funds, and the reorganized company walks out with the balance sheet the case was filed to build.
A Chapter 11 case is won before the petition is filed. The courtroom mostly ratifies the preparation.
120 days
the debtor's initial exclusive period to file a plan of reorganization
Frequently asked
Common questions on Chapter 11 reorganizations.
What is a Chapter 11 reorganization?
Chapter 11 is the chapter of the US Bankruptcy Code that lets a financially distressed business reorganize rather than liquidate. The company usually continues to operate as a debtor in possession while it stabilizes, negotiates with creditors, and proposes a plan of reorganization that, once confirmed by the court, restructures its debts and binds dissenting creditors. The aim is to preserve the going-concern value of a viable business that a piecemeal liquidation would destroy.
What does the automatic stay do when a company files?
The automatic stay takes effect the moment a Chapter 11 petition is filed and halts most collection efforts, lawsuits, foreclosures, and enforcement against the company and its property. It gives a distressed business breathing room to stabilize operations and negotiate without creditors racing to seize assets. The stay is broad but has limits. Secured creditors can ask the court to lift it for cause or for lack of adequate protection, which is one of the first contested issues in many cases.
What is debtor-in-possession financing and why does it matter?
Debtor-in-possession (DIP) financing is new credit extended to a company after it files Chapter 11, often with court-approved priority or liens that put the new lender ahead of existing creditors. It funds operations through the case so the business can keep running while it reorganizes. Negotiating the size, pricing, covenants, and milestones of a DIP facility is one of the most consequential early steps, because the terms frequently set the pace and the balance of power for everything that follows.
How is a plan of reorganization confirmed?
The company proposes a plan that sorts creditors and equity into classes and describes how each will be treated. Impaired classes vote, and the court will confirm the plan if it meets the Bankruptcy Code's requirements, including good faith, feasibility, and the best-interests test. Where a class rejects, the plan can still be confirmed over the objection through a cramdown, provided it does not unfairly discriminate and is fair and equitable. Building a confirmable plan is largely an exercise in valuation, classification, and creditor negotiation.
What is a 363 sale and how does it fit into Chapter 11?
A sale under Section 363 of the Bankruptcy Code lets a company sell assets, or substantially all of its business, free and clear of most liens and claims with court approval, often through a court-supervised auction. It is used when the enterprise is worth more sold as a going concern than reorganized, or when speed and a clean title outweigh the benefits of a long plan process. We structure stalking-horse bids, bidding procedures, and sale orders, and coordinate the sale with the plan when both are in play.
Does Hart David Carson LLP represent creditors in Chapter 11, or only debtors?
Both, though only one side in any given case. We advise companies and boards pursuing a reorganization, and we represent lenders, bondholders, funds, landlords, and other creditors and committees protecting their position. Having worked both sides informs how we read the balance of power, valuation, and the other party's likely next move. Where a Chapter 11 case intersects with a regulator, we represent clients in matters before agencies such as the SEC, the CFTC, and the IRS.
Related
Adjacent restructuring and insolvency practices.
Distressed M&A & 363 Sales
Sales of distressed businesses, divisions, and assets, structured for speed, certainty, and clean title when the enterprise is worth more than the entity around it.
Explore →Creditor & Committee Representation
Representation for lenders, bondholders, funds, and official committees protecting recovery and shaping plan treatment in distressed and insolvency proceedings.
Explore →Out-of-Court Workouts
Consensual amendments, standstills, refinancings, and balance-sheet restructurings negotiated outside formal process, resolving the situation while the company still holds the timetable.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice