What happens on day one of filing a Chapter 11 bankruptcy case?
Strategy and planning are the foundation of a successful Chapter 11 bankruptcy matter in Florida’s United States Bankruptcy Courts. At Michael H. Moody Law, P.A., we prioritize organization and transparency throughout what can be a complex process. What happens behind the scenes before filing your Chapter 11 business bankruptcy is critical to the success of the case. What is filed on day one often determines whether the case stabilizes operations or immediately encounters conflict with lenders and creditors.
This article explains the voluntary petition, schedules, first day motions, and Subchapter V considerations in a Chapter 11 bankruptcy case.
The Voluntary Petition
Your Chapter 11 business bankruptcy begins with filing a Voluntary Petition in the United States Bankruptcy Court.
The petition:
- Identifies the debtor entity
- Lists estimated assets and liabilities
- Indicates whether the case qualifies as a small business case
- Elects treatment under Subchapter V, if applicable
The moment the case is filed, the automatic stay under 11 U.S.C. Section 362 goes into effect.
The automatic stay immediately stops:
- Foreclosure actions
- Lawsuits
- Garnishments
- Repossession efforts
- Certain contract terminations
This protection provides the business with immediate stability and breathing room.
Schedules and Statement of Financial Affairs
At Michael H. Moody Law, P.A., we strive to file the Statement of Financial Affairs together with the Voluntary Petition whenever possible. This requires gathering financial documentation in advance. Hiring organized and proactive counsel is essential to ensuring accuracy and efficiency.
These filings disclose all assets and debts, identify insiders, reveal recent financial transactions, and provide transparency to creditors and the court. Accuracy and completeness are critical.
The required documents include:
- Schedules A and B for assets and liabilities
- Schedule D for secured creditors
- Schedules E and F for unsecured creditors
- Schedule G for executory contracts and leases
- Statement of Financial Affairs
- Creditor mailing matrix
Case Management Summary in Subchapter V
In a Subchapter V case, your attorney must also file a Case Management Summary. This document demonstrates to the court, the trustee, and creditors that the case is organized and structured.
The Case Management Summary outlines:
- The nature of business
- The secured debt structure
- Litigation exposure
- The projected restructuring path
- Whether the debtor intends to file a consensual or nonconsensual plan
A well-prepared summary establishes credibility at the outset of the case.
First Day Motions
First day motions are emergency requests asking the court to authorize immediate relief so the business can continue operating.
Common first day motions include:
- Motion to use cash collateral
- Motion to pay insider or affiliate salaries
- Application to employ professionals
- Motion to maintain existing bank accounts
- Motion to pay critical vendors in larger cases
These motions are designed to preserve operational continuity and prevent disruption.
Corporate Ownership Statement
The Corporate Ownership Statement provides transparency to the court and is required under Bankruptcy Rule 7008.1.
This statement:
- Identifies equity holders
- Discloses parent companies
- Assists with conflict checks
- Confirms compliance with disclosure rules
Transparency at the outset builds trust with the court and creditors.
Why Day One Strategy Matters
At Michael H. Moody Law, P.A., we take a proactive approach to every Chapter 11 case. Day one strategy often determines the trajectory of the restructuring.
A properly prepared day one filing:
- Stabilizes operations
- Establishes credibility
- Frames the restructuring narrative
- Reduces lender aggression
- Preserves management control
With over 17 years of bankruptcy experience, Michael H. Moody Law is prepared to guide you and your business through the Chapter 11 process. Contact our office for a free consultation. We offer in person and telephone consultations and provide a document checklist in advance so we can help position your business for a successful restructuring.
Resources – Guide to the Small Business Reorganization Act of 2019
Northern District of Florida – United States Bankruptcy Court Chapter 11 Reorganization