A vendor faces a thicket of decision points and pitfalls when a customer files for bankruptcy. Corporate counsel can more effectively navigate these situations by building a basic toolkit of rules to know, facts to gather and questions to ask. You will be better equipped to successfully advise your business teams and work with outside counsel to maximize payment and minimize exposure by focusing on three critical topics: dealing with existing orders and contracts, filing claims for debts owed and defending against preference claims.
The Bankruptcy Code automatically creates an “estate” generally composed of all the company’s property owned as of the bankruptcy filing. It also imposes a sweeping “automatic stay” enjoining creditors from collection and enforcement activities against the company and its property. This injunction gives the bankrupt business “breathing room” to assess its operations and financial condition, and to develop a plan to exit bankruptcy through reorganizing as a going concern, a sale of assets or both. In most corporate bankruptcies, the company is a “debtor-in-possession,” meaning that the company retains possession of its assets and continues operating while it formulates and implements a bankruptcy strategy.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
