Corporate Bankruptcy Essay -- Business Management

Corporate unsuccessful person Building a successful commercial enterprise is very difficult and when doing so some may encounter pecuniary hardship. The law has established a process that can help rescue businesses. This is called loser. What is pausecy to a company? How does bankruptcy rescue businesses? The reader will understand the meaning of bankruptcy to a corporation, be familiarized with types of proceedings, and identify with businesses that support been rescued by bankruptcy proceedings. Bankruptcy is a federal system of statutes and courts which permits persons and businesses which are unable to pay debtors or in some cases face potential insolvency, to place their financial responsibilities under the constraint 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 cross-file a petition with the bankruptcy court. This called filing for willful 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 three 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 legal actions lik e foreclosure and other imposition of judgment. Businesses cannot file for bankruptcy again for seven 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 clock 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 wellhead for busines... ...mart.com). This is new recovery and Kmart has a long way to go according to ABC 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 fight for its survival. 3M, NationsRent, and Kmart have all made it through and they are looking for a promising future.Work Cited 3M attach to web page. Http//www.3m.comCompany News Citing Weak Demand, 3M Says it is Cutting one hundred twenty-five Jobs, New York T imes, 2003.Section C. P.4. Http//www.newyorktimes.comLaw Dictionary, http//www.law.comLorrie Grant. Kmart should exit Chapter 11 quietly, expert say. USA Today. April 2004Minnesota Mining & Manufacturing Company (3M) International Directory of Company Histories, Vol. 26. St. James 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 Bryant. NationsRent, Hoover.com, http//www.hovers.com/nationsrent/--ID_57275--/free-co-factsheet.xhtml. retreived July 12, 2006