Often it is in the best interests of all parties involved – debtor, creditors, management, and shareholders – to resolve an insolvency through negotiation and consensus rather than the courts.
Out-of-court settlements are frequently a viable and preferable option for those involved in problem credit situations – especially when rehabilitation looks promising. These settlements offer lower costs, and control remains with the parties rather than the court.
South Bay Law Firm’s professionals – and our network of strategic partners – understand the dynamics of out-of-court negotiation, and are therefore able to quickly and accurately assess and document advantageous settlements.
When out-of-court negotiations are unsuccessful, or when emergent insolvency demands immediate action, the protection and power of the Federal Bankruptcy Court may be called upon to address business or public-entity insolvency.
The U.S. Bankruptcy Code is universally regarded as one of the most well-developed and sophisticated insolvency schemes in the world. It offers both 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 U.S. Bankruptcy Courts and are well-positioned to assist clients in deriving maximum advantage from this statutory scheme.
Receiverships – initiated through either state or federal courts – can provide an alternative judicial means of addressing insolvency.
Receivers are sometimes 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 might otherwise prove difficult or impossible.
South Bay Law Firm’s professionals understand the dynamics of receiverships, and can therefore advise clients regarding the unique benefits and burdens attendant to this judicial insolvency alternative.
When a liquidation or quick sale of a business is in prospect, an assignment for the benefit of creditors (ABC) offers a statutorily recognized and contractual method of addressing insolvency.
ABCs often provide a viable and 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.
South Bay Law Firm can help clients weigh the comparative benefits of this and other liquidation alternatives in light of their unique circumstances. We can also utilize our extensive network of existing relationships with assignees to determine the optimal fit for the client’s particular situation.