Chapter 11 bankruptcy is available to condominium associations. It can provide a lifeline for an association in financial difficulty. A Chapter 11 bankruptcy filing allows the association to reorganize its debts and make arrangements to pay all or a portion of the debts while obtaining protection from creditors. Our Broward office has filed numerous reorganization cases throughout South Florida.
Many condo associations are facing serious financial problems from past hurricanes and financial slow downs. Recent events in Surfside may also result in increased financial pressure. A number of condo complexes have already been forced to evacuate their units following the increased scrutiny resulting from the Champlain Towers disaster. Many associations will be compelled to accelerate necessary repairs.
We have already heard from a number of the Associations that we represent that special assessments for repairs are getting harder to collect. We have dealt with these types of issues in the past and may be of help for your association.
While not a solution for all associations, a reorganization can stop pending lawsuits and levies, force all creditors to deal with the association in one forum, prevent utility companies from terminating service and allow the association to reject unfavorable leases. The association should have a clear exit strategy before filing. We have successfully confirmed plans for several associations.