MDM spoke with Howard Levine, partner at Sussman Shank LLC in Portland, OR, and attorney for Western Tool Supply in its reorganization through Ch. 11 bankruptcy. He spoke about the process and what factors make success more probable.
MDM: Provide an overview of what it means when a company files for Ch. 11 bankruptcy protection.
Howard Levine: The bankruptcy code is simply a tool that’s available to companies in financial distress that empowers the company with certain provisions of the law to change agreements that it has with its creditors. In its simplest form that is what bankruptcy is. What Ch. 11 does to a large extent is changes the leverage between the debtor and its creditors.
In Ch. 11 the idea is that the creditor and debtor are supposed to get together and figure out a business solution to their problems. In my view, it’s a shared problem.
