Corporate Bankruptcy

Corporate Bankruptcy

The recommendation by our team to file a bankruptcy case is made only after a complete business analysis takes place, which goes beyond your company’s immediate troubles and focuses on your business as a whole; its operations, its financials, its past, present and your goals for the future. A bankruptcy filing is advised only in the event that it's in your best interests.

Chapter 11 Reorganization

A chapter 11 bankruptcy is technically considered a reorganization for a business, although it can also be used to assist a company in selling or winding down its operations. A chapter 11 bankruptcy allows a company to continue to operate in its ordinary course of business but with the benefit of the “automatic stay” in place – a court-imposed bar which prevents your creditors (your lender, suppliers, landlord, labor union, taxing authorities, etc.) from continuing their efforts to collect monies due. This bar can remain in place, in most cases, until together we are able to propose a plan of reorganization. Often times, some “breathing room” from your creditors is just what your company needs to regroup, rebuild and restructure, leaving you with a stronger, more solvent company with increased cash flow and a brighter future.

Just a few of the benefits of a chapter 11 can include:

• Substantially discounting trade debt by as much as 90%
• Restructuring and repaying obligations over a longer term in a way that makes sense for your business’s cash flow
• Selling the business or assets free and clear of the claims or liens of its creditors
• Terminating burdensome contracts or premises, equipment or other types of leases
• Achieving payment terms with your taxing authorities over a five (5) year period and substantially discounting penalties
• Stopping collection efforts for as long as ten (10) months, and sometimes longer
• Avoiding impending foreclosures, labor strikes, repossessions, restraints and seizures

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is a liquidation of a company by a court-appointed trustee. This process can be very useful where ownership wishes to shut down business operations, walk away and leave much of the details to someone else. While not an appropriate option for every business, in certain situations a chapter 7 liquidation can accomplish a “clean death” for a business, with minimal effort and cost on the part of the management and ownership.

In a Chapter 7 process, the assets of a company are gathered by the trustee, liquidated and distributed to the company’s creditors in accordance with a statutory priority scheme; typically, secured creditors (such as creditors with liens on the assets of the company), priority creditors (such as certain taxes, wages, benefits) and then to the ordinary trade creditors. In this scenario, ownership can feel confident in moving on from the failed business without the concern of trailing liabilities and fallout.

Other Bankruptcy Related Services

Creditor Representation

As a creditor, a bankruptcy filing can feel like you’ve lost control. We can help you get that back.

One of the most important deadlines for a creditor during a bankruptcy case is the filing of a proof of claim. Our team will work with you to make sure that your claim is properly and timely filed, helping to ensure the best possible recovery.

From the simple preparation and filing of a proof of claim, to filing a hostile Chapter 11 plan and everything in between, we have the capability, experience and experience to handle it all.

Examples of our past creditor representations include:

• Appearance at Section 341(a) Meeting of Creditors;
• Conducting valuable discovery and taking depositions of the Debtor and related parties;
• Representing secured creditors including negotiation of and contested cash collateral proceedings;
• Compelling compliance by the Debtor of post-filing obligations and enforcing remedies for failure to do so;
• Prosecuting Non-Dischargability proceedings;
• Forcing a sale of the Debtor’s assets;
• Seeking Dismissal or Conversion of the Debtor’s case;
• Obtaining Relief from the Automatic Stay;
• Filing hostile Chapter 11 plans;
• Representation of secured creditors during auction processes and in credit bidding scenarios; and
• Commencing an involuntary bankruptcy case against a debtor.

Involuntary Bankruptcy Filings

Creditors can gain a great deal of control by forcing a non-paying debtor into bankruptcy, in appropriate circumstances wresting control of the company’s finances from the current owners. We can counsel you on the benefits and practicality of this option for creditors.

Preference and Fraudulent Conveyance Actions

Over the course of a bankruptcy case, lawsuits are often filed against creditors or companies whose sole involvement with the bankrupt company was limited to regular business transactions during the months leading up to the bankruptcy filing. These lawsuits are usually based upon very limited information and are received by a shocked and confused business owner.

Preference actions and fraudulent conveyance (or fraudulent transfer) actions are very often filed with the sole intention of prompting a settlement. Most of these claims are defensible. In many cases, we have achieved the dismissal or settlement of these lawsuits through a simple exchange of information demonstrating a solid defense. When necessary, our skilled team can efficiently litigate these claims and typically achieve a resolution for substantially less than the amount demanded.

Distressed Asset Acquisition

Many companies and investors are able to capitalize on these challenging economic times by repositioning themselves for growth and acquisition. We have represented many of these industry players as they maneuver within the bankruptcy and distressed asset markets. Whether you are a traditional or non-traditional investor looking to purchase assets from a chapter 11 or chapter 7 estate, our team can successfully guide you through the process.