Working With Debtor Business Clients

I represent businesses having financial difficulties in various ways depending on the circumstances, including by helping them through the process of shutting down and liquidating, through reorganization informally outside of bankruptcy, or through the use of the bankruptcy system with a chapter 11 reorganization.

Some debtor business clients have already decided on bankruptcy based on well thought out strategic reasons for filing bankruptcy and have well defined exit plans. However, for most business clients one of the first questions is how to avoid bankruptcy. In that case, I help to identify and execute pre-bankruptcy options, including business loan modifications, restructuring of vendor obligations, sale of assets, revision of contract terms. And based on what is learned in that process, I can help with planning and implementing new contract forms, and new ways to review and score business opportunities as to financial feasibility and overall future benefit to the client company.

Whether working to avoid bankruptcy, doing pre-bankruptcy planning, or conducting a bankruptcy case in chapter 7 liquidation or chapter 11 reorganization, the process can be stressful and difficult for the client. Therefore, I make it a priority to work closely with business clients to be sure they set clear and measurable goals, understand the options we develop to achieve their goals during our preliminary discussions and planning, including understanding the steps necessary to achieve their goals, how to avoid the factors that interfered with success in the past, and to determine and insure feasibility of an agreed upon plan.

It is best to plan up front. Ideally, in the absence of an emergency requiring immediate filing, after working with the client to explore and chose among options, I then begin to flesh out all the details before any bankruptcy filing. When appropriate, I explain and discuss the plan with key creditors, vendors and employees in order to seek their input and support. And in the event of a planned chapter 11 case, I draft reorganization plan term sheet before the case is filed. Then we can hit the ground running and be prepared to manage the case smoothly and deal effectively with creditors, the US Trustee and the Court, even in the face of challenges and opposition.

A key step in the financial and business planning for a business in financial distress is to include advice regarding informal reorganization and bankruptcy options. Please consider contacting me for a consultation should you believe that my services might benefit your company.