The difficulties of filing for Chapter 11 bankruptcy were described by U.S. Bankruptcy Court Judge Randolph J. Haines, an adjunct professor at the College of Law, in an article in the Jan. 29 East Valley Tribune.
In “Fulton assures homeowners after bankruptcy,” by reporter Edward Gately, Haines said companies need permission from a bank or the court to spend cash on hand to cover current expenses and to borrow new money to keep the business going through a reorganization plan. These steps are followed by a vote by creditors on the company’s reorganization, Haines said.
Fulton Homes filed for Chapter 11 on Jan. 27.
“Everybody’s thought is, what’s going to happen in the future?” said Haines, who is not presiding over the Fulton case. “How good is this company going to be managed? What’s going to happen to the marketplace? It’s difficult to project that.”
Read the complete story at http://www.eastvalleytribune.com/story/134708.