Unfortunately, many businesses are confronted with extraordinary losses and may be forced to choose between a creditor workout or a reorganization bankruptcy in order to survive. Some of the differences between workouts and bankruptcies include.
- Timing. A creditor workout is generally faster than a bankruptcy and can involve only a few major creditors as opposed to all. Bankruptcies also take longer because of the required notices and formalities.
- Cost. A creditor workout is usually less expensive than a bankruptcy as there are fewer filings and professional fees.
- Disruption to Operations. Unless a company is publicly, traded, owned, or has publicly