Corporate Bankruptcy Essay -- Business Management

Corporate Bankruptcy Building a successful business is rattling difficult and when doing so some may encounter monetary hardship. The honor has established a process that basis help rescue businesses. This is called bankruptcy. What is bankruptcy to a company? How does bankruptcy rescue businesses? The reader will infer the meaning of bankruptcy to a corporation, be familiarized with types of proceedings, and identify with businesses that invite been rescued by bankruptcy proceedings. Bankruptcy is a federal corpse of statutes and tourist romances which permits persons and businesses which are unable to pay debtors or in some cases font potential insolvency, to place their financial responsibilities nether the control of the bankruptcy court (www.law.com). The way this works is that when the businesss debts exceed its assets or is unable to pay, the business can file a petition with the bankruptcy court. This called filing for voluntary bankruptcy.If a business does not file for bankruptcy the unpaid creditors can file an involuntary petition to force the business into bankruptcy (www.law.com). It is better and just about common for businesses for file voluntary bankruptcy (www.law.com). There are deuce-ace types of petitions Chapter 7, Chapter 11 and Chapter 13 (www.law.com). The most popular is for business to petition is under Chapter 7 (www.law.com). In Chapter 7, businesses are appointed a trustee by the court (www.law.com). The trustee is like a financial wizard. The trustee counts up the businesses assets with the plans of keeping them from the bankruptcy, pays debts the business owes with paying taxes first (www.law.com). The trustee then focuses on paying secured debts such as mortgages and lastly unsecured debts (www.law.com). Then the court officially declares the business bankrupt and discharges the unpayable debts, this is a lost for the creditors (www.law.com). Filing a bankruptcy petition will suspend all existing sound actions lik e foreclosure and other imposition of judgment. Businesses cannot file for bankruptcy again for seven-spot years (www.law.com). Chapter 11 bankruptcy allows a business to reorganize and refinance to prevent dislocation of the organization (www.law.com). Most of the time there is no trustee appointed, but the business is given time to present a plan of reorganization (www.law.com). This does not always work well for busines... ...mart.com). This is modernistic recovery and Kmart has a long way to go according to first rudiment news.In conclusion, bankruptcy is a way for businesses to rescue themselves when in financial hardship. Not every company will make it. Some may be lost, but the law provides every business the opportunity to contest for its survival. 3M, NationsRent, and Kmart have all made it through and they are looking for a promising future.Work Cited 3M Company web page. Http//www.3m.comCompany News Citing vague Demand, 3M Says it is Cutting 125 Jobs, New York Times , 2003.Section C. P.4. Http//www.newyorktimes.comLaw Dictionary, http//www.law.comLorrie Grant. Kmart should exit Chapter 11 quietly, in force(p) say. USA Today. April 2004Minnesota Mining & Manufacturing Company (3M) International Directory of Company Histories, Vol. 26. St. mob Press, 1999. Reproduced in Business and Company Resource Center. Farmington Hills, Mich. Gale Group. 2006. Http//galenet.galegroup.com/servlet/BCRCNationsRent Company web page. Http//www.nationsrent.com troy weight Bryant. NationsRent, Hoover.com, http//www.hovers.com/nationsrent/--ID_57275--/free-co-factsheet.xhtml. retreived July 12, 2006