CV580Freak
Topic Author
Posts: 886
Joined: Sat Jul 23, 2005 12:39 am

Max Allowed Time For CH 11?

Thu Sep 08, 2005 8:34 am

Well it looks as though CH 11 is on the cards for a few of the major US legacy carriers.

Under US law, what is the maximum allowable time period for CH 11 protection before the courts allow creditors to start to seize assets ??
One day you are the pigeon, the next the statue ...
 
Bridogger6
Posts: 664
Joined: Sat Apr 02, 2005 11:21 am

RE: Max Allowed Time For CH 11?

Thu Sep 08, 2005 8:35 am

Ask UA, they seem to be pushing the limits.  Smile
 
metsfan1
Posts: 101
Joined: Fri Jul 25, 2003 12:57 am

RE: Max Allowed Time For CH 11?

Thu Sep 08, 2005 10:07 am

When you file for bankruptcy you as a debtor you get what is called a period of 'exculisvity' where you can file you plan of reorganization. After that the creditors can file one for you. This is usually an 18 month period but can be extended by a Bankruptcy Court judge for various reasons. (see United)
I believe the new laws place a cap on exclusivity of 18 months with no exceptions.

Most Ch 11's last between 18-24 months. So considering that United is the largest Ch 11 in history it doesn't surprise me that their case has taken so long. There are a lot of issues to work out with many different parties.

As a side note to those who complain about them being in CH 11 so long. It is better to be in for a while (see Contitnental almost 5 years in early 90's)and get it right than go through the process too quickly to land back in Ch 11 soon after. (see US Airways 7 months in Bankruptcy)

Bankruptcy in this country has largely worked. It rescues companies worth saving and weeds out bad ones. (most of the time)

I do bankruptcy research for a living so feel free to ask any questions and I will do my best to answer.

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