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Restructuring and insolvency law governs how financially distressed businesses reorganize or liquidate. In Hollywood, production companies, talent agencies, post production houses, and distributors frequently navigate debt, contracts, and IP rights under time pressure. The primary tool is federal bankruptcy law, especially 11 U.S.C. Chapter 11, which allows a company to reorganize while continuing operations under court supervision.
Key concepts include the automatic stay that halts creditor collection efforts, a bankruptcy court supervised plan of reorganization, and a creditors committee that represents various interests. Debtors may seek debtor in possession (DIP) financing to fund operations during reorganization. In practice, many Hollywood entities pursue a prepackaged Chapter 11 or Subchapter V for smaller businesses to streamline the process.
For Hollywood residents, cases are typically filed in the U.S. Bankruptcy Court for the Central District of California, which serves the Los Angeles area including Hollywood. Local procedures and rules supplement federal law, shaping filing requirements, notices, and timelines.
Chapter 11 provides a structured path to restructure debt while continuing business operations under court supervision.
Source: U.S. Courts - Bankruptcy Basics and Central District of California information. U.S. Courts - Bankruptcy Basics, U.S. Bankruptcy Court for the Central District of California.
Hollywood businesses face unique financial and contractual complexities that benefit from specialized counsel. A skilled restructuring and insolvency attorney can help you evaluate options, preserve IP rights, renegotiate key contracts, and navigate court procedures. The following scenarios illustrate concrete needs that often arise in Hollywood
Restructuring in Hollywood relies on federal bankruptcy law supplemented by local rules and state-level fraud avoidance tools. The following items are central to practice in Hollywood, California
Recent changes and trends include the expanded use of Subchapter V to simplify small business restructurings and to reduce bankruptcy costs. The Small Business Reorganization Act of 2019, effective February 2020, created Subchapter V within Chapter 11 and altered eligibility, plan formation, and creditor voting dynamics. Subchapter V overview
For context in Hollywood, these tools are frequently used for production companies, distributors, and services tied to IP rights and IP licensing agreements. See official government sources for up-to-date rules and procedures: U.S. Courts - Bankruptcy Basics and Central District of California Bankruptcy Court.
Subchapter V simplifies court procedures and reduces the costs of a Chapter 11 plan for eligible small businesses.
Sources: U.S. Courts - Bankruptcy Basics; Subchapter V overview; Central District of California Local Rules. Subchapter V - Small Business Reorganization Act, Central District of California Local Rules.
Chapter 11 allows a company to reorganize debt while continuing to operate. In Hollywood, this can preserve IP rights and film projects, while negotiating with creditors under a court supervised plan. The process includes filing, automatic stay, creditor committees, and a plan of reorganization.
Non complex cases may complete within 4-9 months after filing a plan, but larger productions or prepackaged plans can extend to 12-18 months. The duration depends on asset complexity, contract negotiations, and DIP financing needs.
A prepackaged Chapter 11 combines debt negotiations with a plan before filing, reducing hearing time and costs. It is advantageous when a production schedule or IP licensing needs a swift resolution to avoid downtime.
Subchapter V is a streamlined form of Chapter 11 for small businesses. Eligibility depends on debt limits and other criteria set by law. It aims to simplify plan formation and reduce costs for smaller Hollywood entities.
Costs vary by complexity and firm. Expect hourly rates ranging from $350 to $1,000 per hour for experienced insolvency attorneys in Los Angeles, plus court filing and administrative fees. Fixed fee options may be available for specific tasks.
You must file where you have your principal place of business or where you reside if an individual debtor. Hollywood entities typically file in the Central District of California, which includes Los Angeles.
An automatic stay halts most collection actions when a bankruptcy case is filed. It protects the debtor from eviction, lawsuits, and creditor demands while the case proceeds.
A plan explains how creditors will be paid and how the business will operate post bankruptcy. It requires approval by the court and typically a vote by impaired creditors in the case.
Yes. Chapter 11 permits suspending or renegotiating contracts and licenses under court supervision while protecting IP assets, which is critical for film and talent agreements.
Alternatives include out-of-ccourt workouts, Chapter 7 liquidation, or a California-based assignment for the benefit of creditors. The right choice depends on assets, debt levels, and ongoing operations.
Post confirmation, distributions and wind-down steps may take a few weeks to several months, depending on payment schedules and the complexity of remaining assets.
Prepare a list of assets, IP rights, contracts, creditor details, recent financial statements, and a summary of ongoing production commitments to help the attorney assess options quickly.
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