Chapter 11 Bankruptcy Attorney -
In any given local community, for example, there may be 50-100 attorneys who are regular filers of Chapter 7 and 13 cases, but only a small portion who have the requisite experience and skill-set to effectively handle Chapter 11 cases.
"Big" Cases vs. "Small" Cases
The "big" cases filed by the airlines, automobile companies, and large corporations, are usually Chapter 11 cases. These larger cases are usually handled by large law firms having hundreds, if not thousands, of lawyers across the country. For the smaller Chapter 11 case, however, e.g., a debtor with under $ 5 million in assets or liabilities, the attorney is usually a bankruptcy attorney who specializes in such cases.
A good Chapter 11 attorney needs to know Chapter 11 law, especially the requirements for confirmation of a plan found in Bankruptcy Code Section 1129. He or she needs to be conversant with the local court rules regarding status conferences and court filings, as well as with all of the detailed monthly operating reports and other required filings, including U.S. Trustee reports. He or she needs to be able to interact effectively with the creditors and creditors' counsel, including a creditors committee, if one has been formed.
Chapter 11 cases often are won by the Chapter 11 debtor and its counsel persuading the creditors to accept the reorganization proposal as being superior to what the creditors would receive if the plan were not to be confirmed. The attorney needs to be able to analyze a debtor's financial projections, and incorporate them into a disclosure statement and plan which can be made palatable to the creditors and interested parties. Finally, the attorney should be able to zealously represent his client in court at contested matters and adversary proceedings, should the need arise.
Interviewing Prospective Chapter 11 Attorneys
A debtor contemplating the filing of a Chapter 11 case may wish to interview several possible candidates. A time-honored way of finding a good lawyer is by referral, i.e., talking to people whom the debtor trusts who are familiar with the field and then getting a recommendation. Chapter 11 cases are attractive for the attorney because of the higher compensation which normally comes with such filings. Some debtors with desirable, attractive possible filings conduct a "beauty contest" of prospective lawyers. At these meetings, the client can interview the attorneys and quiz them on their success rates on such cases in the past, and determine if the attorney and client would be a good fit and be able to operate successfully in a team effort.
Attorney's fees for a Chapter 11 are negotiable, and vary from state to state, and court to court. Typically, the Chapter 11attorney wishes to obtain as large a pre-petition retainer as is possible, from which he can draw during the Chapter 11 while he performs his services. The majority of the Chapter 11 cases fail, so often an attorney will not be compensated for his services unless he was paid upfront. In many of the smaller Chapter 11 cases, which might be called "glorified Chapter 13s," the retainer might be somewhere in the neighborhood of $ 7500 to $ 20,000 or more. In the more complicated cases, retainers can be anywhere in the range from $ 25,000 up to $ 100,000 or more.
All of the fees are subject to the approval of the court
as being reasonable. Attorneys who overcharge and gouge their clients face a very
real prospect of having to "disgorge", or give the money back. The filing
fee for a Chapter 11 is $ 1,039.00. The cost to stay in Chapter 11 is usually
$ 350 to $ 1,000 per quarter, consisting of U.S.
In conclusion, finding a competent and experienced attorney
can often be the paramount factor in determining the success of a
Chapter 11 bankruptcy case. It is by far the most complicated of the
Chapters. It requires specialized knowledge, negotiating ability,
and courtroom skill to help assure a successful result.
Written by Henry Rendler
Written by Henry Rendler
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