Chapter 11 Bankruptcy

Topics: Bankruptcy, Debtor, Getty Oil Pages: 5 (710 words) Published: December 21, 2014


Chapter 11 Bankruptcy
Opal Shaw
American Public University System
Legal Practices for Small Business
ENTR615 B002 Fall 14
Dr Tonya Curry
November 16, 2014

Chapter 11 Bankruptcy is one that is available to small business, corporations and partnership. There is no definite limit of debt you must occur before you can file bankruptcy. The main purpose why business files a Chapter 11 is to seek help in restructuring your debt and reorganization. In Chapter 11 the debtors are usually given the opportunity to keep their assets and continue to operate their business but this is done under the supervision of the courts. This is for the beneficial of the creditors so that they can get pay. In most cases a trustee is appointed to supervise the proceedings. Chapter 11 is one of the most flexible Chapters to do, in that it is the hardest to generalize and can be expensive to the debtor. It however can help the debtor to reduce the obligations and help to change their payments so that they can balance their income and expenses. Doing so, will help to gain business success and continue with its operation. Another option is to sell all of their assets and downsized their business operations. Texaco was my choice of business to investigate. I choose this company because this company was one that I have admired over the years and never thought that it would have had any issues in its operations. Although this company filed a Chapter 11 a long time ago, I thought reading and writing about the proceedings was a great one for me to absorb. According to the New York times (l987), An article indicates that Texaco files bankruptcy for relief and is seeking relief and legal protection in order not to go down and to fend off the then existing pressure from seizure of their assets with Pennzoil dispute, this assets was over 11 billion dollars. Texaco is one of the world largest oil companies and seems to be one of largest company ever to seek bankruptcy. There are other companies like Kmart and Kodak is about to go into bankruptcy proceedings. This filing came into effect after several meetings with different boards and negioations with Pennzoil. The Chief executive of Texaco J Kinnear mentioned that the proceedings were the most painful decision for him and board members. The reason for Texaco bankruptcy proceedings was that it was accused of illegal interference with Pennzoil aim to purchase Getty Oil Company and was sue for billions of dollars. This filing was to put a halt of the deteriorating in their finances and legal rulings, however, this cause Texaco to lose a large sum of their cash assets which eventually cause the banks and suppliers to seize credit despite of their over 35 billion assets. Under Chapter 11 Bankruptcy a company is permitted to continue doing business under the existing management while it repays its creditors, which they did. The process of filing bankruptcy was strenuous but was able to keep most of their workers, while they go through the process. While Texaco still exist in many countries especially in the Caribbean, Chevron has taken over many of the stores and renamed it. In today’s flattering economy and businesses are all over the globe fighting for space in the global society. Some decided to do things that are not ethical and sometimes illegal to make their space in the global marketplace without thinking twice of the repercussion or impact it can have on our business. While Bankruptcy is one of the options one can have in operating a business, this should be a last resort to save your business, but it is not illegal to do so. While I was reading, I found out that many individuals are filing bankruptcy and individuals too, this has become the norm of our society today. This may be because of the economy or businesses are not spending the time to run their business effectively. This can have an impact of the employees who has a family and for the...

References: Http://www.Moran law/net/Chapter 11.htm: Chapter 11 Bankruptcy reorganization.
Texaco files for Bankruptcy relief: seeks legal protection to fend off assets seizure, retrieved:
http://articleslatimes.com/l987-04-13/news/mn-508 bankruptcy protection.
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