PDF Ebook Trade Creditor Bankruptcy Guide: A Practical Customer Bankruptcy ”How To” Guide For Trade Creditors
This handbook is designed to assist commercial trade creditors in identifying the appropriate steps to take when a customer files for bankruptcy. After providing a general overview of the bankruptcy process, this handbook focuses on certain key issues that a trade creditor is likely to encounter during a customer’s bankruptcy proceeding. These issues include:
- (a) the initial response steps a trade creditor should undertake after it learns that a customer has or is expected to file bankruptcy;
(b) asserting a reclamation claim;
(c) defending against a preference action;
(d) filing a proof of claim;
(e) serving on a Chapter 11 Creditor’s Committee; and
(f) continuing to do business with a Chapter 11 debtor
In addition, this handbook also addresses the subject of when a trade creditor might consider forcing a customer into an involuntary bankruptcy.
Although we hope that the information in this handbook will help trade creditors in responding to various bankruptcy-related issues and concerns, this handbook is not intended to serve as a substitute for individual legal advice with regard to particular matters or proceedings. The bankruptcy laws are very complex and can have dramatically different effects on the rights and interests of a trade creditor depending upon the particular facts involved in a given case. Trade creditors confronted by a customer’s bankruptcy filing are strongly encouraged to consider seeking the advice and assistance of an experienced bankruptcy attorney to ensure that their rights and interests are fully and properly protected.
CONTENTS
I. Introduction
II. Overview of Bankruptcy
- A. Chapter 7 Proceedings
B. Chapter 11 Proceedings
C. Chapter 13 Proceedings
III. Initial Response Steps
- A. Verification of the Filing/Obtaining Case Information
B. Stop All Collection Efforts Against the Debtor
C. Stop Goods in Transit
D. Consider Reclamation Rights
E. Discontinue Credit Sales
F. Calendar Important Dates
IV. Reclamation Rights
- A. “Reclamation” Defined
B. Timing and Notice Considerations Inside of Bankruptcy
C. Timing and Notice Considerations Outside of Bankruptcy
D. Reclamation Demands and the Automatic Stay
E. Necessary Follow-Up Steps
F. Limitations on Reclamation Rights
V. Preferences
- A. Preferences—An Overview
B. Policy Rationales Behind the Bankruptcy Code’s Preference Provisions
C. Defenses to Preference Actions
D. Procedural Issues
E. Concluding Observations
VI. Filing Proofs of Claim and the Bankruptcy Claims Process
- A. Necessity of Filing Proof of Claim
B. Claims Bar Date
C. Preparing a Proof of Claim
D. Filing a Proof of Claim
E. Amending Proofs of Claim
F. Claim Objections
VII. Chapter 11 Creditors’ Committees
- A. Formation
B. Purpose and Responsibilities
C. Retention of Professionals
D. Function and Operation of the Committee
E. Fiduciary Duties of Committee Members
F. Advantages of Serving on a Committee
G. Disadvantages of Serving on a Committee
VIII. Doing Business with a Chapter 11 Debtor
- A. Obligation to Continue Doing Business with Chapter 11 Debtor
B. Chapter 11 Debtor’s Continuing Authority to Do Business
C. Switching to COD Payment Terms
D. Continuing to Make Credit Sales to a Chapter 11 Debtor
E. Creditor’s Remedies When A Chapter 11 Debtor Fails to Pay For Post-Petition Goods
IX. Involuntary Bankruptcies
- A. Eligibility for Filing an Involuntary Petition
B. Grounds for Filing an Involuntary Bankruptcy
C. Reasons for Filing an Involuntary Bankruptcy
D. Risks of Filing an Involuntary Bankruptcy
X. Appendix
- A. Glossary
B. Sample Reclamation Demand
C. Sample Proof of Claim Form
D. Bankruptcy Court WebSite Information
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