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An accomplished attorney with nearly two decades of legal experience, Hugh M. Ray III serves as a partner at Pillsbury Winthrop Shaw Pittman, LLP. In this capacity, Hugh Ray III practices within the firm’s Insolvency and Restructuring Practice and handles such matters as a commercial litigation and corporate bankruptcy.
Filing for bankruptcy is often an option for companies that can no longer remain operational or pay their bills. However, companies may have different experiences depending on whether they file Chapter 7 or Chapter 11 bankruptcy.
Chapter 7 bankruptcy is typically only chosen when a corporation decides that reorganizing the business will not create a profitable company. Once this type of bankruptcy is filed, the business completely ends its operations and is fully liquidated. A bankruptcy trustee is appointed through a bankruptcy court to oversee the process of liquidation and is responsible for selling corporate assets to pay creditor accounts, legal expenses, shareholders, and bondholders. Owners are paid at the very end if there is any money left after all other debts and investors are paid.
During a Chapter 11 bankruptcy, businesses can remain in operation and retain more control over the bankruptcy process. Rather than giving a trustee control over a business’ assets, companies that file Chapter 11 can restructure their financial framework to become profitable again. However, all major business decisions must be approved by a bankruptcy court and companies may still be liquidated if they are unable to become profitable after restructuring.
Hugh Ray III 
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