Central District Consumer Bankruptcy Attorney's Association

I want to run a scenario by the brain trust:
Corporate debtor files for bankruptcy relief about one year after it has
already been dissolved. A party purchased from the corporation's former
shareholder the rights to a contract to be a re-seller for a cell phone
company a couple of weeks into the case. However, the contract retained
the name of the corporate debtor even after dissolution. The fact that the
company was dissolved was disclosed in the petition, but nothing about the
distribution of such contract to the shareholders was disclosed, but,
except when a corporation doesn't even have a pen to its name, corporate
dissolutions usually necessarily involve such distributions.* Is there any
conflict of interest if, after the Chapter 7 Trustee has issued a no asset
report, the same attorney who represented the debtor in the corporate
filing represents the party who acquired the contract to be a re-seller for
a cell phone company?*
Note that the former shareholder asked the cell phone company to transfer
the contract to the new party but the cell phone company did not approve
the transfer until a couple of months into the bankruptcy case. The new
party to the contract, in the meantime, has sold product for the cell phone
company and has become entitled to commissions, but the intermediary
between the cell phone company and the new party refuses to release
commissions even those earned after the contract was transferred to the
name of the new party without the approval of the Chapter 7 trustee.
*Second, does the Chapter 7 trustee own anything? *The bankruptcy case was
filed long after the corporation had been dissolved (it was filed at the
request of the major creditor of the corporation as it enabled it to more
smoothly reflect the loss in its books, reportedly). In addition, while
the Chapter 7 trustee may have an avoidance action, the transfer of the
contract did not render the corporation insolvent as it was already
insolvent by that time. What say you?
Giovanni Orantes, Esq.
Certified Bankruptcy Specialist*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 1980
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
Note: The information contained in this e-mail message is confidential
information intended only for the use of the individual or entity named. If
the reader of this message is not the intended recipient or an agent
responsible for delivering it to the intended recipient, you are hereby
notified that any dissemination, distribution or copy of this communication
is strictly prohibited. If you have received this communication in error,
please immediately notify us by telephone or e-mail and delete the original
e-mail at (213) 389-4362 or (888) 619-8222.
IRS Circular 230 Disclosure: In order to comply with requirements imposed
by the Internal Revenue Service, we inform you that any U.S. tax advice
contained in this communication (including any attachments) is not intended
to be used, and cannot be used, for the purpose of (i) avoiding penalties
under the Internal Revenue Code or (ii) promoting, marketing, or
recommending to another party any transaction or matter addressed herein.
I want to run a scenario by the brain trust:Corporate debtor files for bankruptcy relief about one year after it has already been dissolved. A party purchased from the corporation's former shareholder the rights to a contract to be a re-seller for a cell phone company a couple of weeks into the case. However, the contract retained the name of the corporate debtor even after dissolution. The fact that the company was dissolved was disclosed in the petition, but nothing about the distribution of such contract to the shareholders was disclosed, but, except when a corporation doesn't even have a pen to its name, corporate dissolutions usually necessarily involve such distributions. Is there any conflict of interest if, after the Chapter 7 Trustee has issued a no asset report, the same attorney who represented the debtor in the corporate filing represents the party who acquired the contract to be a re-seller for a cell phone company?
Note that the former shareholder asked the cell phone company to transfer the contract to the new party but the cell phone company did not approve the transfer until a couple of months into the bankruptcy case. The new party to the contract, in the meantime, has sold product for the cell phone company and has become entitled to commissions, but the intermediary between the cell phone company and the new party refuses to release commissions even those earned after the contract was transferred to the name of the new party without the approval of the Chapter 7 trustee.
Second, does the Chapter 7 trustee own anything? The bankruptcy case was filed long after the corporation had been dissolved (it was filed at the request of the major creditor of the corporation as it enabled it to more smoothly reflect the loss in its books, reportedly). In addition, while the Chapter 7 trustee may have an avoidance action, the transfer of the contract did not render the corporation insolvent as it was already insolvent by that time. What say you?
-- Giovanni Orantes, Esq.Certified Bankruptcy Specialist*
Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776
e-mail: go@gobklaw.comwebsite: www.gobklaw.com
*Board Certified - Business Bankruptcy Law - American Board of Certification*Board Certified - Consumer Bankruptcy Law - American Board of CertificationWE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.Note: The information contained in this e-mail message is confidential information intended only for the use of the individual or entity named. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone or e-mail and delete the original e-mail at (213) 389-4362 or (888) 619-8222.
IRS Circular 230 Disclosure: In order to comply with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

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