.jpg)
Chapter 11 cash collateral budget and "reimbursements" for
1. How do you get your Chapter 11 clients to understand before the Court
enters the Order on the cash collateral budget that they really, really,
really, really need to be sure that budget contains everything they
absolutely need in there because if not, they can't pay it? I have tried to
convey this but twice now I have experienced that panicked call the day
after the order is entered, saying, "Can I pay X, Y and Z? I didn't know
about it."
2. So I have an officer who uses his personal credit card for business
travel and related expenses (only) and the debtor company pays the card
directly. He didn't know he had a balance on the card when we filed, but
the creditor now says he needs to pay it tomorrow or have the card closed.
If the card is closed, he can't travel for the debtor business.
Of course the INTERIM cash collateral budget that was entered yesterday
makes no mention of reimbursing or paying such credit card expenses. We do
have a line item for "travel" and for "miscellaneous" which if used, would
cover what is owed on this card.
We have a FINAL cash collateral hearing on April 18, 2018 (so not too far
away).
My concern is that it's a prepetition debt that's owed to the officer
and/or his personal credit card (but solely for business expenses), and we
made no specific mention of this in the cash collateral budget.
I do not believe I can get an amended order between now and tomorrow when
the creditor says the card will be shut off if not paid by tomorrow. (I can
try. We have an agreed order with the bank on using its cash collateral,
but this might require one of those all nighters to pull it together and I
am pissed about having to do this.)
Would you recommend (1) paying the credit card from the travel and misc
budget items even though this is for a prepetition reimbursement, or (2)
prepaying the officer's salary pursuant to the amount in the budget for
that item and having him pay the credit card directly while we go in next
month on the 18th to get him reimbursed for that with a final budget, or
(3) seeing if I can get an amended stip and order entered on the cash
collateral budget, or (4) something else?
The last thing I want to do is have our very first MOR show that the debtor
is not complying with the first court order entered in this case.
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
1. How do you get your Chapter 11 clients to understand before the Court enters the Order on the cash collateral budget that they really, really, really, really need to be sure that budget contains everything they absolutely need in there because if not, they can't pay it? I have tried to convey this but twice now I have experienced that panicked call the day after the order is entered, saying, "Can I pay X, Y and Z? I didn't know about it."2.travel and related expenses (only) and the debtor company pays the card directly. He didn't know he had a balance on the card when we filed, but the creditor now says he needs to pay it tomorrow or have the card closed. If the card is closed, he can't travel for the debtor business.Of course the INTERIM cash collateral budget that was entered yesterday makes no mention of reimbursing or paying such credit card expenses. We do have a line item for "travel" and for "miscellaneous" which if used, would cover what is owed on this card. We have a FINAL cash collateral hearing on April 18, 2018 (so not too far away).My concern is
The post was migrated from Yahoo.
1.
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
1.
The post was migrated from Yahoo.