Buy essay on The bankruptcy

Individual Project
Petition
The bankruptcy is an essential tool that helps companies and individuals to start afresh and avoid unnecessary financial losses of creditor. In this respect, the procedure of bankruptcy and starting afresh can be facilitated through filing Chapter 7 of Bankruptcy, which was developed specifically for cases of bankruptcy of companies which stop their operations and go out of business. In this respect, the case of partnership, Walnut Street Four, is one of the cases which is liable to Chapter 7 of Bankruptcy. At any rate, Beren does have the right to file the petition for involuntary bankruptcy and he will be right as long as the company cannot function anymore and it cannot pay off its debts. In actuality, the bankruptcy of the company seems to be the only way out of the current situation. This is why Beren can file the petition for the involuntary bankruptcy under Chapter 7.
However, it is necessary to take into consideration the context in which Beren files the petition for the involuntary bankruptcy. In this respect, it is worth mentioning the fact that Beren is one of the partners, whereas his partners Elliot and Mannino are not really willing to file the petition. Moreover, the major cause of the failure of the company is the misunderstanding and disagreement between partners. What is meant here is the fact that the company could have survived if partners come to agreement and borrow more money to start up their business, which could bring positive outcomes and the company could pay off its debts. However, the disagreement between partners led the company toward bankruptcy. In such a context, it would be more logical for partners to come to consensus first on the further strategy of the company’s development and only after that take decision on whether to file the petition under Chapter 7 or not.

Plan of Reorganization
The plan of the reorganization suggested by Friese under Chapter 11 was declined by creditors that is a substantial obstacle for the court to confirm the debtor’s plan. In this respect, it is important to lay emphasis on the fact that in terms of Chapter 11 the debtor’s plan should be voted for by creditors and only after that it can be confirmed by the court. In actuality, there are some alternatives, such as resuming status quo as before the bankruptcy, but neither alternative admits the possibility of the debtor to impose the implementation of his plan on creditors. To put it more precisely, Chapter 11 encourages the close cooperation between the debtor and creditors that means that Friese should look for agreement between his creditors to obtain the positive votes for his plan. Otherwise, he should develop a new plan of reorganization that meets interests and needs of his creditors. In such a situation, the court cannot confirm the plan developed by Friese. If he fails to come to agreement with his creditors on the plan of reorganization, the court should convert the case to a liquidation under Chapter 7. However, it is important to remember that, in such a case, Friese will have to stop his business activities, whereas under Chapter 11 he can carry on his business to pay off his debts. Thus, the solution of the problem on the plan of reorganization will define the procedure of bankruptcy.