It is often in the best interests of all constituencies – debtor, creditors, management, shareholders – to resolve an insolvency through negotiation and consensus.
Out-of-court settlements are frequently a viable and preferable option for those involved in problem credit situations – especially where rehabilitation looks promising for the debtor. The chief advantages of such settlements are that costs are lower and control remains with the parties rather than with the court or other parties.
South Bay Law Firm’s professionals understand the dynamics of out-of-court negotiation and are able to quickly and accurately assess and document advantageous settlements.
bankruptcy
Where out-of-court negotiations are unsuccessful, or where emergent insolvency requires immediate action, the protection and power of the federal Bankruptcy Court may be necessary to address business or public-entity insolvency.
Regarded universally as one of the most well-developed and sophisticated insolvency schemes in the world, the US Bankruptcy Code offers debtors and creditors a comprehensive “menu” of options for restructuring debt, protecting collateral, proving claims, effecting sales, and obtaining business financing.
South Bay Law Firm’s professionals have years of experience before the US Bankruptcy Courts and are well-positioned to help clients derive maximum advantage from this statutory scheme.
RECEivership
Receiverships – initiated either through state or federal courts – can provide an alternative judicial means of addressing insolvencies.
Receivers have been regarded as “legal luxuries” by some courts. Under the proper circumstances, however, a receiver – acting as the “hand of the court” and consistent with the court’s equitable powers – can achieve desirable results that would be otherwise difficult or impossible.
South Bay Law Firm’s professionals understand the dynamics of receiverships and are able to advise clients regarding the unique benefits and burdens attendant to this “judicial alternative” to insolvency problems.
assignment
Where a liquidation or “quick sale” of the business is in prospect, an assignment for the benefit of creditors, or “ABC”, offers a statutorily recognized and “contractual” method of addressing business insolvency.
Assignments are often viewed as a viable, inexpensive means of sale when a firm’s liquidity crisis precludes the use of Chapter 11, or when an appointed Chapter 7 trustee is unlikely to maximize the value of the firm’s intellectual property or “relationship capital.”
When an “ABC” is in prospect, South Bay Law Firm is able to help clients weigh the comparative benefits of this and other liquidation alternatives. The firm can also utilize its existing relationships with a network of assignees to determine the optimal “fit” for the client.
