Bankruptcy is a complex legal process. With years of experience working in every aspect of bankruptcy CCM’s attorneys and paraprofessionals can examine your situation to determine the best way to proceed based on the facts and circumstances of your situation.
Chapter 11 Reorganization
- Chapter 11 allows viable but distressed businesses to restructure debt and compel creditors like suppliers, banks, and landlords to modify payments or accept payments over time through a confirmed of plan of reorganization.
- Chapter 11 will let your business continue operations following guidelines and requirements set out in the Bankruptcy Code and by the United States Trustee while it restructures.
- CCM’s professionals have long history of guiding businesses through the Chapter 11 process; from preparing the petition and monthly reports to working with stakeholders and creditors to formulate a plan of reorganization and soliciting its acceptance.
- CCM can help achieve the ultimate goal of obtaining court confirmation for the plan – even if it is contested.
Chapter 7 Liquidation
- Sometimes the best option is not to reorganize but to cease business. Filing a Chapter 7 stops collection efforts by creditors and allows for the marshalling and liquidation of assets by a court appointed trustee.
Chapter 11 Liquidation
- Unlike a Chapter 7 liquidation where operations cease, it is the business acting as a debtor-in-possession who typically controls the wind-down process with input from creditors, the court and U.S Trustee’s office.
- Similar to a Chapter 11 reorganization, the debtor-in-possession instead winds down its business by preparing a plan and soliciting acceptance from creditors to liquidate assets and distribute the proceeds according to the priority scheme set out in the bankruptcy code.
It is important to have someone well versed in the complex area of bankruptcy guiding you when a person or entity owing you money is in financial trouble or files bankruptcy. The stakes get higher and consequences to you as a creditor for missteps can be serious, costly, or both.
Collecting on a Debt
- Once a debtor files for bankruptcy under any chapter you are automatically precluded from making anyattempt to collect on the debt.
- CCM can evaluate your claim, the likelihood of recovery and the options available to maximize that recovery.
- It is important to determine the priority of your claim, whether it is secured, unsecured or has a priority status.
- CCM can determine your best courses of action and assist with things such as:
- preparing a proper proof of claim that can withstand objections;
- seeking relief from the automatic stay to allow secured creditors to recover collateral;
- bringing an adversary proceeding to object to a proposed plan, the treatment of your claim or the discharge or the dischargability of the debt you are owed.
- Timely asserting your rights is critical. Deadlines in bankruptcy can be short and strictly enforced.
- A debtor or trustee in bankruptcy makes a demand that you return money you were paid by the debtor prior to the bankruptcy. This is called a “preference payment” – essentially, your debt was paid ahead of (preferred over) other creditors.
- While you are not being accused of doing anything wrong you need to know how to respond.
- The presumption is that payments made during certain periods are inherently preferential and the money must be returned to a common “pool” of funds to be redistributed to all creditors on a pro-rata basis based on the priority of their claims.
- There are technical defenses that need to be analyzed and, if applicable must be vigorously advanced to prevent your disgorging the payment mitigating the amount returned.