Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events
Businesses need to prepare for the short and long term challenges that await as COVID-19 continues to impact the economy.
Lindabury is collaborating with Spector & Ehrenworth, a well respected New Jersey bankruptcy and creditors’ rights law firm, to assist clients with challenges they may face, including customers and vendors unable to meet their financial commitments, as well as cash flow or liquidity concerns.
Below are some issues you may encounter and with which our team can assist. Please contact us with any questions you may have.
Protect Your Rights as Creditor
There will be no shortage of businesses seeking bankruptcy protection as a result of COVID-19. Filing a timely and complete Proof of Claim will identify for the Bankruptcy Trustee the debt you are owed.
Customer / Vendor Bankruptcy
Customers or vendors unable to pay debts may consider filing bankruptcy. Developing a workout plan between you and the debtor before they file for bankruptcy may avoid or lessen the need for bankruptcy relief. Alternatively, a properly structured settlement could enhance your recovery in a bankruptcy.
Reclaiming Your Goods
Vendors whose customers have recently filed for bankruptcy have the right to take back certain goods sold on credit. The demand must be made properly and in a timely manner and could entitle the vendor to a priority claim above other creditors.
Continuing Business Operations During Bankruptcy
Businesses struggling now may emerge stronger from a bankruptcy reorganization and remain a viable client.
Lease Assumption Concerns for Commercial Landlords
Commercial landlords will need to address issues related to the assumption and assignment of leases for retail tenants who file for bankruptcy. In most cases, tenants in bankruptcy can assign leases that contain anti-assignment clauses. Landlords need to know the limitations to these rights of assignment and how to enforce them.
Preference Actions and Keeping Your Cash
Debtors and Trustees may seek to recover certain payments made to creditors in the time leading up to the debtors’ bankruptcy filing. Creditors need to know the available defenses and how to assert them to pursue a favorable settlement and avoid costly litigation.
Assignment for the Benefit of Creditors
Assignment can allow business debtors to transfer an operating business or its assets to an acquiring entity without formal bankruptcy proceedings.
Representation of Bidders in Bankruptcy Auctions
Bankruptcy auctions can offer strategic growth opportunities through the purchase of businesses or their assets free and clear of liens, claims, and encumbrances. Being able to benefit from the sale of certain business-related items can allow for more financial freedom moving forward.
Court-Ordered Stay Relief
The moment a debtor files for bankruptcy, substantially all collection actions are placed on hold. However, in certain situations opportunities exist for creditors to petition the Court to lift the stay and allow collection efforts to resume.