A written tour of business bankruptcy and its alternatives. This is the latest in the series, Dealing with Distress for Fun & Profit, which you can read from the beginning if you like1. Our last installment focused on the basics[...]
The 2019 edition of Strategic Alternatives For And Against Distressed Businesses was just released by West Publishing Company. This 1,800+ page treatise, which is a product of more than 100 contributors, is the only resource which provides a state-by-state comparison[...]
QUESTION: Bill H., a business consultant in NYC, asks, how do I determine if a business I am being asked to help is just too far gone to save? ANSWER: Bill, if you have to ask this question, you might[...]
One of your customers sends you notice it has filed for chapter 7 or chapter 11 bankruptcy protection rather than the payment for goods or services provided that you were expecting. You understand that you now have a “claim” against[...]
When a borrower defaults on its loan agreements,[i] a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a[...]
How to Protect Your IP License Rights In 1888 – yes 1888 – Kodak coined the slogan: “You press the button, we do the rest.” The company, which was immortalized in Paul Simon’s song “Kodachrome1”, sold its assets – at[...]
What you need to know as a secured lender to a borrower who goes into bankruptcy you should know already, well in advance. If your borrower’s bankruptcy filing has taken you by surprise, please refer to my next article in[...]
Insufficient liquidity shrinks the range of options for a financially distressed business. The metaphor of a melting ice cube is often used to illustrate the situation. When the cash runs out and the company is unable to pay its employees or vendors, the ice cube has melted. The business has failed, and recoverable value has collapsed.
Bankruptcy Valuation Valuation—the estimation of an entity’s worth—plays a crucial role in all stages of a commercial bankruptcy, as well in any out-of-court restructuring.¹ Valuation can be critical at the beginning of a bankruptcy case in determining whether the debtor[...]
A company’s “capital structure” is the array of its liabilities and equity. Capital structure commonly consists of three main components: working capital (or operating debt), financing debt, and equity.
“The time to buy is when there’s blood in the streets.” - Baron Rothschild Don’t Panic, There Are Many Opportunities in Bankruptcy When a client or a competitor files for bankruptcy, it is natural to reflect on the downside. What’s[...]
NAFER (the National Association of Federal Equity Receivers) held another wisdom-rich conference in October, this time at the Drake Hotel in Chicago. It was the seventh annual event and attracted 200 attendees. The conference included the Training Camp as well[...]
If you are a vendor, service provider or another unsecured creditor to a chapter 11 debtor, you cannot be blamed for feeling like a duped lover after learning about the bankruptcy of your once devoted business companion. Despite the promises[...]
Chapter 11 bankruptcies find the debtor generally to be insolvent, but not always. Occasionally, a debtor will emerge from the bankruptcy process as a solvent entity, and in those situations, Bankruptcy Code §726(a)(5) may entitle creditors of the debtor’s estate[...]
The Life, Death and Many Reincarnations of Penthouse Magazine Penthouse International, publisher of Penthouse Magazine, sold for $11.2 million in June. The company was worth about $700 million (adjusted for inflation) at its height. The latest Penthouse Magazine bankruptcy highlights just[...]
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