Corporate Bankruptcy – Some Interesting Facts

Feb 21st, 2014 | By | Category: Guide

To be able to fully understand the complexities of bankruptcy, corporate companies have to hire the services of corporate bankruptcy attorneys. There are many corporate bankruptcy attorneys who work independently. There are those that are hired by firms. One cannot independently hire those employed by firms. The firm is hired for the file and then they assign one or several of their attorneys to a specific case. The firms are typically more expensive to hire than the independent attorneys.

Bankruptcy attorneys are specialized in this field. A corporation cannot hire a normal lawyer to represent them during their corporate bankruptcy filing. When a corporation employs the services of corporate bankruptcy attorneys they must be informed of the capabilities and the limits of these attorneys as stipulated by law.

With the world more globally interconnected than ever, even established companies can take an unexpected tumble and be forced into restructuring or bankruptcy in a matter of weeks or months. Could a global recession slice into your business? What about a collapse in your best customer’s industry, or a crippling supplier meltdown? In many cases the corporate secretary will be charged with putting together a team to handle the restructuring or bankruptcy, a process that must happen quickly if the company …

Some corporations have corporate bankruptcy attorneys on retainer. This means that the attorneys are paid a certain degree to always be offered to represent the corporation whenever needed. Many companies choose to have corporate bankruptcy attorneys on retainer even if they never find themselves having to file for bankruptcy. This is because corporate bankruptcy attorneys assist with something more than filing for bankruptcy. They also advise their clients on what rights they have in relation to their creditors. This is very important in order to avoid creditors exploiting their debtor’s financial obligations to them. It is likewise good to get a corporate bankruptcy attorney on retainer in the case where the need to file for bankruptcy does occur. If it does the attorney will already be knowledgeable about the business’ activities and the business will feel comfortable with the attorney as it will have established a relationship.

More Random Corporate Bankruptcy Stuff

Bankruptcy is one of the more complex sections of the law. There are many federal and state rules regarding bankruptcy. For this reason corporate bankruptcy attorneys are specialised in their area after undergoing several years of education and training. Corporate bankruptcy attorneys are a must when a business or corporation is required to file for bankruptcy. This is mandated by law. The attorney deals with several issues when filing in the name of a business or corporation. Some of the things that the attorney has to grapple with are tax, contract, corporate and real property law. For example, the attorney has to understand laws regarding various types of contracts that the corporation may have with other businesses, with employees and obviously with its creditors.

One of the functions of the corporate bankruptcy attorney is to make certain that the debtor is always protected against any unscrupulous creditors who could try to capitalize on the corporation’s vulnerable financial position. Corporate bankruptcy attorneys must be able to do so within the limits of the law. Also, good corporate bankruptcy attorneys will be able to file for bankruptcy in the name of their clients and secure favourable settlements for them with regards to liquidating the corporation or not. The ultimate aim would be to enable the corporation to continue to operate while settling its debts over time. The worst possible outcome for any corporation is to have to close down and have all of its assets sold off to pay back its creditors.

FAQ’s: Personal Bankruptcy, Corporate?
If I file a personal bankruptcy and I have a small share in a corporation, can a trustee get into the Corp ?

  • If you file a Chapter 7 bankruptcy the trustee can organize the sale of your assets to satisfy your creditors (pay your debts). This could include the sale of the shares in the company. Assuming there is value, someone may buy them ahnd will then have an ownership interest in the company in accordance with the shares. Unless the shares represent the majority of the company's equity the owner will not be able to control the company.

  • The corporation has to complete each phase of the filing correctly, otherwise it could be heavily fined. Which is why, it is important for any corporation filing for bankruptcy to hire the very best attorney that it can afford. Also, it is important to know that the creditors also have rights when one of its debtors files for bankruptcy. Corporate attorneys should be able to obtain the best possible outcome for its client and also satisfying the creditors in such a way that the two parties can continue to do business together in future, once the debts have been settled. Without the assistance of a good attorney, corporations risk having the business totally liquidated, as described above.


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