By personality I am an optimist. I believe business is not going away, and will come roaring back if we give it a chance. Nevertheless, many otherwise good businesses will experience serious cash flow or other financial issues during the economic downtime. Chapter 11 reorganization is a versatile tool that can help a struggling business restructure its debt and weather the storm. I have recommended it to individuals, and to businesses fairly frequently over the last year. But, it is not for everyone or all situations.
In general, a Chapter 11 reorganization can work in the best interests of the debtor and all creditors, since one of its purposes is to see that they all get paid fairly, without preference of some over others. Chapter 11 can be a great benefit to some real estate owners who are in danger of losing property valued far in excess of their mortgages. In addition, it’s no secret that during 2004 and 2005 businesses spent, invested, and borrowed, based on their projections for the future. Those projections have changed, obviously, but every one of us has reason to believe our businesses are still valuable. Some must be protected from immediate demands just to preserve their long-term value. That is what Chapter 11 is all about.
Years ago I had a student in one of my classes who announced his intention to go to law school. That was my first contact to Lou Long. Lou graduated with honors, became a lawyer, and started his practice as a law clerk to the Federal Bankruptcy Judge in Tallahassee. In time he became an A Rated sole practitioner doing mostly Bankruptcy and collection practice.
Lou long and his family moved back to this area several years ago. Lou is now a partner in this firm, and he has become busy trying to keep real estate owners and businesses afloat that he gets in a lot less fishing time than he planned.
I have asked Lou to contribute an article to this spot in this paper. He will soon discuss Chapter 11 Bankruptcy proceedings and other relief in bankruptcy for our readers.
Until then, in my opinion we are indeed fortunate to have Lou’s specialization represented among those areas of law available in this community.