The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

- William Arthur Ward, Writer

Creditors' Rights

Unfortunately, the economic difficulties of today leave few businesses unaffected by legal issues involving unpaid debts, non-performing loans and possibly a bankruptcy filing by account debtors. Understanding your rights as a creditor is the key to keeping your business on course. The attorneys at Iurillo Law Group, P.A. represent clients on a wide range of collection and bankruptcy matters. Our creditor clients are primarily secured and unsecured creditors, such as lenders, financial institutions, trade creditors, guarantors, shareholders, landlords, franchisors, former spouses and other business vendors. We also represent bankruptcy trustees and receivers.

Because our practice casts a broad net and encompasses pre-suit negotiations with debtors, state and federal court collection litigation and bankruptcy, we are able to provide our clients with a unique perspective on managing their collection matters. We will work with you to develop a strategy to recover from distressed debtors. We provide focused, practical advice to our clients as we recognize that a certain result is often preferred over protracted litigation. However, the decisions of other parties may require litigation in order to protect our clients' rights, including trial. Our reputation as tough advocates on behalf of our clients has been established by battling through the storm and not backing down even in the face of adverse headwinds, until and unless a fair compromise is reached.

Pre-Suit Negotiations and Litigation

Our goal is to provide value to our creditor client's business by assisting them with converting unpaid receivables or non-performing assets into cash or performing assets in the most effective and efficient manner possible. Our attorneys who have been practicing collectively for over 35 years are experienced in negotiating pre-suit resolutions with account debtors. If those efforts are unsuccessful, we will discuss the available claims that could be made in a lawsuit and develop a litigation strategy. Post-judgment, creditors have several remedies available to them to collect, including taking the deposition in aid of execution of debtor to compel a debtor to disclose its assets and liabilities, garnishing bank accounts and other financial accounts such as brokerage accounts, executing on real and personal property of the debtor and filing claims such as fraudulent transfers, successor liability, piercing the corporate veil and alter ego claims against additional parties that may be liable for the debt or improperly received assets of the debtor.

Bankruptcy Representation

When a debtor files bankruptcy, our experience 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.

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