Creditors Rights in Business Professional and Individual Bankruptcies

When a debtor files bankruptcy, our experienced bankruptcy attorneys advise our creditor clients as to their rights bankruptcy. Based on our experience representing a variety of creditors throughout the United States since 1991, we provide our clients with creative and aggressive solutions in bankruptcy cases. However, we are also mindful that our clients do not want to waste time and resources chasing bad debt, and therefore we will also provide you with counsel as to the reality of recovery in the case.

Examples of creditors’ rights issues that commonly arise in bankruptcy are as follows:

Landlords have specific and unique rights to compel lease payments and to compel the debtor/tenant to accept or reject the lease; however, affirmative action must be taken by the landlord to obtain these benefits. Also, landlords are often surprised to learn that under certain circumstances, a debtor/tenant may assign a lease. We have successfully represented landlords seeking to enforce those rights and require debtors to comply with the bankruptcy code when their lease is rejected, accepted or assigned. Also, the damages incurred by a landlord when a debtor/tenant files bankruptcy are controlled by statute. We guide our clients through the calculation of the claim.

Secured lenders, unsecured lenders or other unsecured creditors such as vendors may be faced with a debtor attempting to use the bankruptcy code to the creditor’s detriment. However, creditors are not without certain protections and rights in a bankruptcy case. Quickly seeking the advice of counsel allows the creditor to understand those protections and rights and take appropriate action. For example, generally speaking, secured creditors have the right to receive payment while the bankruptcy case is pending and/or to obtain a bankruptcy court order allowing the creditor to proceed in state court to foreclose on real property or to repossess collateral. Unsecured creditors such as vendors of goods may have the right to reclaim products that were delivered to the debtor in a certain time period before the bankruptcy filing.

Another type of creditor we frequently represent is personal injury claimants. Depending on the type of bankruptcy case filed and the availability of insurance, we work with our clients to obtain bankruptcy court approval to proceed in state court to liquidate the claim, to collect against insurance and to seek recovery on any portion of the claim not covered by insurance through the bankruptcy claims procedure.

Importantly, creditors must keep in mind that there are important time limitations in bankruptcy and therefore it is important for creditors to act quickly and seek advice of counsel.

Please review our Business Litigation and Bankruptcy Litigation pages for additional information that may be relevant to creditors. In addition, please review the description of the broad range of clients we commonly represent on our Representative Clients page.

We possess a deep understanding of our clients’ industries and listen closely to their goals to determine the best course to resolve obligations owed to them whether through restructuring or enforcement. We address disputes firmly avoiding emotional arguments that escalate costs, distract from best results or lead to unfounded counterclaims. These efforts often achieve greater lenders/creditors recoveries than selling to purchasers of the problem credits. If the parties cannot resolve matters reasonably, we often initiate litigation seeking prejudgment remedies to protect our clients’ recoveries and expedite resolutions. If litigation causes a bankruptcy filing, we have the necessary experience for that as well.