Bankruptcy
As a business attorney New York, The Lawyer James deals with a lot of distressed companies, those who have agreed to financing deals that are sub optimal (often merchant cash advance arrangements), and at times, even detrimental to the survival of the business. A lot of these companies have no alternative access to capital, and therefore work with their only sources of capital. Other times, these companies are facing serious cash crunches. Sometimes they can pull out and emerge unscathed, other times, they cannot. Many times we are able to settle cases out of court, other times we take advantage of New York’s court system, both federal and state, to settle cases. The Lawyer James has over 20 years experience as a business attorney New York.
When cases do not settle, or creditors are unwilling or unable to agree to the terms that would enable a distressed business to survive, we turn to the provisions of the United States Bankruptcy Code. For businesses, this typically means Chapter 11. In those bankruptcy cases where there is a lot of value in keeping the company as a going concern, and generating revenue, and continuing operations, we tend to reorganize, or seek to reorganize, those companies through Chapter 11. In those instances where there is no prospect of reorganizing, we shut down operations in an orderly fashion and we liquidate. In either case, within Chapter 11, the existing management stays on for a period of time to help reorganize or liquidate. Sometimes, a Chapter 11 Trustee is appointed when it is appropriate to do so. In all of these instances, the experience of The Lawyer James as a business attorney New York is helpful in many ways.
The Lawyer James has extensive experience working on complex Chapter 11 bankruptcies, from both the creditors, side and the Chapter 11 debtors’ side. Some notable cases that The Lawyer James has worked on include MCI Worldcom, Enron, Parmalat, United Airlines, US Airways, Aloha Airlines, America West Airlines, ATA Airlines, Frontier Airlines, Mike Tyson, Landsbanki, Glitnir, General Motors, and Nortel.
In addition, The Lawyer James represented Chapter 11 debtors Delta Financial and Electroglas and confirmed their Chapter 11 bankruptcy plans.
The Lawyer James business attorney New York brings a unique perspective to all of his cases, including the bankruptcy cases he works on. Specifically, because of his business background, he spends less time in legal theory and legal speak, and instead focuses on what matters most: getting creditors paid and coming up with a plan that enables the debtors to emerge from bankruptcy with a viable and thriving road ahead.
This is how The Lawyer James is able to efficiently prepare for and file the Chapter 11 petition and supporting documentation, coordinate and file any “first day” motions, and then work toward getting a Chapter 11 plan done. Here’s a little more detail on those stages.
In the pre-bankruptcy planning stage, it is important to set goals and a timeline, and identify responsibilities. For instance, a lot of the work is preparing bankruptcy forms. These forms are typically available online, and the type of case you are filing dictates the types of forms that you will use. The location (in legal speak, that’s called “venue”) of the bankruptcy is also important, and the local rules may have variations of federal forms and practices that they want you to use. All of these forms and quirks are available online and they are typically easy to find.
One more thing before we get back to the process that is helpful to anchor our thinking. Chapter 11 bankruptcies, and bankruptcies filed under other chapters of the United States Bankruptcy Code (Title 11 of the United States Code, 11 U.S.C. §§ 101-1532). Each local jurisdiction also has their local rules, for instance the United States Bankruptcy Court for the Southern District of New York and the United States Bankruptcy Court for the Easter District of New York have local bankruptcy rules. There’s also an order of reference from the United States District Courts to the United States Bankruptcy Courts for the Bankruptcy Courts to handle bankruptcy cases.
Back to the prefiling process. Remember, it is key to stay organized. Since the bankruptcy forms are number driven, it is a good idea to get a handle on your company’s numbers, if you have not done so already. Typically, a lot of companies work closely with their internal and external financial people, including their Chief Financial Officers and their accountants, particularly concerning the pre-filing work. A couple of key documents, which can either be filed on the date of the Chapter 11 petition filing, or after, with Bankruptcy Court permission, are the Statement of Financial Affairs (or “SOFA”), and the Statement of Assets and Liabilities (or “SOAL”). There are also monthly financial reporting obligations, which are called Monthly Operating Reports. All of these are filed with the Bankruptcy Court, and are all available publicly on the Bankruptcy Court docket. Some people refer to operating in bankruptcy like operating in a fish bowl, because everyone can see your every move and there is full financial transparency.
Well, it looks like we are out of time and space on this page for continuing to cover the Chapter 11 pre-filing and filing process. Call our office at (212) 500-1891 to schedule a FREE consultation with The Lawyer James business attorney New York to discuss the benefits of filing a Chapter 11 bankruptcy case, the opportunities associated with doing so, and potential other options, and the timeline.
One more thing that is important to note: stay focused on the plan, the end goal is to repay creditors. Once a Chapter 11 bankruptcy petition is filed, repaying creditors is the only thing that matters; your focus shifts from acting in the best interests of shareholders, to acting in the best interests of creditors. It’s not a suggestion, it’s a law; your fiduciary duty shifts to creditors. A key tip here is to maximize recovery for creditors, figure out how to get them the best payback, and in the shortest amount of time, either through liquidation, or continuing to operate the business as a going concern.
