To play devil's advocate, I rarely see the point of filing a corporate Ch 7, unless there are assets. In Matt's case, he can explore with his client whether the client should file because of personal liability and whether the client
will have a defense to dischargeability claims by angry creditors. Usually, the creditors are going to go after the principle(s) if they are angry and suspect mishandling of their funds. My two cents ....CF
----- Original Message -----
To:
cdcbaa@yahoogroups.com
Sent: Wednesday, June 29, 2005 9:42 PM
Subject: Re: [cdcbaa] Corporate BK
Absolutely it can file and in many cases it is very beneficial to do so for the principals. It's obviously more beneficial if there are assets for the Trustee to administer, or at least make a determination that they are de minimis value, but there's nothing preventing the filing of a corporate no-asset case. There will be no discharge of debts, but it can make the wind-up of the corporation much easier because the creditors will realize that there's nothing there, which can cut way down on lawsuits, depositions, etc. for the principals. It also gives some closure for the principals as far as allegations of preferential payments, etc.
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----- Original Message -----
To:
cdcbaa@yahoogroups.com
Sent: Wednesday, June 29, 2005 6:19 PM
Subject: [cdcbaa] Corporate BK
Question came up and now I am really confused:
Can a corporatation file a BK if they have no assetts but tons of debt. Client being sued individually, however, heard that corporate BK would resolve his problem....Company was a film production company, solely created for that one film. Film never got off the ground but the debts did...almost a million bucks worth!!!!
So, no assets and of course 727 (a)(1) plays in, but would a bk be helpful at all or the fact that there are no assets to orderly distribute makes the 7 of no practical use???
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To play devil's advocate, I rarely see the point
of filing a corporate Ch 7, unless there are assets. In Matt's case, he can
explore with his client whether the client should file because of personal
liability and whether the client
will have a defense to dischargeability claims
by angry creditors. Usually, the creditors are going to go after the
principle(s) if they are angry and suspect mishandling of their funds. My two
cents ....CF
----- Original Message -----
From:
Mark J Markus
To:
cdcbaa@yahoogroups.com
Sent: Wednesday, June 29, 2005 9:42
PM
Subject: Re: [cdcbaa] Corporate BK
Absolutely it can file and in many cases it is
very beneficial to do so for the principals. It's obviously more
beneficial if there are assets for the Trustee to administer, or at least make
a determination that they are de minimis value, but there's nothing preventing
the filing of a corporate no-asset case. There will be no
discharge of debts, but it can make the wind-up of the corporation much easier
because the creditors will realize that there's nothing there, which can cut
way down on lawsuits, depositions, etc. for the principals. It also gives some closure for the principals as far as allegations of preferential
payments, etc.
***********************************************Mark J.
MarkusLaw Office of Mark J. Markus11684 Ventura Blvd. PMB
#403Studio City, CA 91604-2652(818)509-1173(818)509-1460
(fax)e-mail:
bklawr@bklaw.comweb:
The post was migrated from Yahoo.