When a New York business enters the Chapter 11 bankruptcy process, it is afforded a number of protections. One of those protections prevents the business’s creditors from initiating litigation against it for the collection of the balances owed to the creditors. In essence, bankruptcy puts a hold on any actions against a business while it works out a way to restructure and become financially viable for its continued operation.
The Caesars Entertainment Operating Company, part of the enterprise that operates Caesars casinos around the country, entered Chapter 11 bankruptcy approximately a year and a half ago. The business owed its creditors around $18 billion and since beginning the process has attempted to come up with a plan that would pay back its creditors and allow the business’s continued operation. Unfortunately Caesars and its creditors have not been able to agree to restructuring and repayment terms and Caesars was about to run out of time to make such a deal happen.
However, a bankruptcy court judge has granted the company just over two more months to work out its plan for future operations. If the judge had not extended the date by which Caesars needed to have its plan approved, the company could have lost its bankruptcy protections and faced lawsuits from its creditors for the repayment of its outstanding loans.
Coming up with a plan to repay one’s debts through bankruptcy can involve significant creditor negotiations. If those negotiations fail, a debtor can find himself without a means to stave off creditor litigation, just as Caesars almost faced in its Chapter 11 bankruptcy process. To learn more about business bankruptcy and protecting one’s enterprise from lawsuits from creditors, readers of this blog may wish to speak with bankruptcy attorneys in their communities.
Source: New York Post, “Bankruptcy judge cuts Caesar’s a break – for now,” Josh Kosman, June 15, 2016