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Need to inform the court and creditor body of significant increase in
Individual Chapter 11. Debtor-in-possession has a lot of cash as well as
non liquid assets. DIP also has large disputed debts. If these debts are
reduced as a result of litigation or settlement, the plan will pay 100%.
Elderly DIP became ill and requires nursing care. She incurred $12K in the
last 30 days and will continue to incur the same amount per month in rehab
expenses for 3-4 months. DIP lives modestly and this extra $12K/mo is a
significant increase in her expenses.
This additional expense will not have an impact of her case because
1. Even with the new expenses, she has sufficient cash to continue
operating; and
2. Extra $50K in expenses is a drop in a bucket compared to her assets
of $20M and her debts $15M-$20M.
Whether her case pays 100% or 75% depends primarily on the outcome of
litigation with the IRS and other claimants.
I feel like the court and the creditor body should receive some kind of
notice of this significant change in the DIP's expenses. However, I can't
think of the legal basis for this disclosure nor of the appropriate
procedure.
What should I do?
Alik Segal
Alik.Segal@gmail.com
310-362-6157
California Central District
Individual Chapter 11. Debtor-in-possession has a lot of cash as well as non liquid assets. DIP also has large disputed debts. If these debts are reduced as a result of litigation or settlement, the plan will pay 100%.
Elderly DIP became ill and requires nursing care. She incurred $12K in the last 30 days and will continue to incur the same amount per month in rehab expenses for 3-4 months. DIP lives modestly and this extra $12K/mo is a significant increase in her expenses.
This additional expense will not have an impact of her case because
1. Even with the new expenses, she has sufficient cash to continue operating; and 2. Extra $50K in expenses is a drop in a bucket compared to her assets of $20M and her debts $15M-$20M.Whether her case pays 100% or 75% depends primarily on the outcome of litigation with the IRS and other claimants.
I feel like the court and the creditor body should receive some kind of notice of this significant change in the DIP's expenses. However, I can't think of the legal basis for this disclosure nor of the appropriate procedure.
What should I do?-- Alik SegalAlik.Segal@gmail.com
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