For more than 20 years, Hugh M. Ray III has been practicing law. During this time, he has won numerous awards and served on several legal committees, including the Continuing Legal Education Committee for the Houston Bar Association. Hugh Ray III practices complex reorganization and bankruptcy law for businesses as a partner at Pillsbury Winthrop Shaw Pittman, LLP.

1. TWO COMMON TYPES OF
BANKRUPTCY FOR BUSINESSES
Hugh Ray III

2. INTRODUCTION
• For more than 20 years, Hugh M. Ray III has been practicing law.
During this time, he has won numerous awards and served on
several legal committees, including the Continuing Legal
Education Committee for the Houston Bar Association. Hugh Ray
III practices complex reorganization and bankruptcy law for
businesses as a partner at Pillsbury Winthrop Shaw Pittman, LLP.
Below are two common types of business bankruptcies:
1. Chapter 7: When businesses have so many debts that
restructuring is not an option, they file for Chapter 7 bankruptcy.
This type of bankruptcy means the business is finished and
usually involves the liquidation of a company’s assets.

3. BANKRUPTCY
• . The proceeds pay the Trustee and estate
professionals. Remaining proceeds are used to pay the
business’s creditors.
2. Chapter 11: This option is for companies that need
to control their own liquidation or seek to reorganize
debts in a plan of reorganization. In most cases, a
company can continue operating after filing for
Chapter 11. Creditors cannot usually interfere with
normal operations, but a bankruptcy court will
supervise operations while the debtor and creditors
negotiate a reorganization plan.