Chapter 11 bankruptcies in Rockland County and elsewhere have many components: secured creditors, unsecured creditors, unperformed contracts, partially performed contracts and assets that are difficult to value, just to name a few. Moreover, the Bankruptcy Code specifies a number of requirements that must be met before a reorganization plan can be approved by the court. What happens if, after all of the debts and assets are property valued, one secured creditor objects to its treatment under the proposed plan of reorganization? Can one objecting creditor tip over the entire bankruptcy process just to protect its claim?
Envelope maker and printer seeks Chapter 11 protection
It's common knowledge in Rockland County that the Internet has had a devastating effect on a number of industries. Less commonly known is the effect of the Internet on products that most people take for granted -- stationery and envelopes. As more companies send invoices and other correspondence via email, the need for envelopes has significantly declined. Thus, one of the nation's largest manufacturers of envelopes and mailing supplies, Cenveo, Inc., has filed for Chapter 11 bankruptcy.
What happens to collateral in a business bankruptcy?
One of the most complex issues faced by both bankruptcy debtors and their creditors in New York and elsewhere is the fate of collateral that provides security for one or more of the debtor's liabilities. The automatic stay under Section 362 stops all efforts to levy on the asset that provides collateral for a debt, but the disposition of the claim and the collateral must await further developments in the bankruptcy proceeding.
