Chapter 11 bankruptcy has been witnessed to provide an organization a relief from the heavy debts. Hence, it was not a surprise that the mega resort Baha Mar which was set to open in December 2014, filed chapter 11 bankruptcy pertaining to the delay in its development.
In accordance with the US laws when an organization files for the Chapter 11 bankruptcy, they need to put forward a reorganization plan to pay the creditors requisite debts. This is exactly what the Bah Mar resort will pursue. First and foremost, since the bankruptcy has been filed, thus, the amount of debt has decreased from the actual amount. Another important aspect is that there is no requirement for the business to be shut down. The company, which is involved in the making of the mega resort, has an ample amount of time to come up with respect to a reorganization plan.
With the reorganization plan, it will be able to negotiate better and feasible repayment terms. They will not be required to be perplexed with regards to the debt obligation in the scenario. In fact, as many times as the creditor claim for the money, the debtor can object a claim and come up with its own plan. However, it is also imperative that the plan is accepted by the court in accordance with the US laws.
The organization is required to renegotiate leases and contracts. The creditors which will be paid back primarily will involve state and federal tax agencies, wages of employees and the interest of stockholders.