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Chapter 11

Discussion in 'Business Fundamentals' started by TCLA, Feb 24, 2009.

  1. TCLA

    TCLA 2000 Club Member
    Messages: 2,699

    If you were on contract to service a client and you just received notice that they filed chapter 11, would you continue servicing the client?

    Keep in mind the client owes you a great deal of money, some of which is over 60 days old. :cry:
     
    Last edited: Feb 24, 2009
  2. Dubliner

    Dubliner Senior Member
    Messages: 130

    If they go bankrupt if you get anything it will more than likely be pennies on the dollar, beware. They take all the assets, turn them liquid and divy the money out to the creditors.
     
  3. Dubliner

    Dubliner Senior Member
    Messages: 130

    If it's a business, you might want to check with the bankrupcy judge for a judgement on continuing service. Gets sticky. MHO
     
  4. valpoguy

    valpoguy Member
    Messages: 49

    Absolutely not, you recieved notice, so you are listed as a creditor, so you'll not see a dime. The only way i would consider servicing them is if they pay cash, and attempt to pay some of their debt with you. If i were you I would show up to their proceedings and make sure they are listing all of their assets, I have a buddy going through the same thing right now, the person going BK has transfered things to his girlfriend to avoind losing them, which is fraud if it is within 90-120 days of the BK, I'm not 100% sure of the time frame.
     
  5. lbfmd

    lbfmd Member
    Messages: 48

    check and see who the Bankruptcy judge put in charge? an 11 is restructuring before liquidating anything. They nornmally put a trustee in place to pay the bills and what normally happens is your bills after the filing will get paid quicker, but the billing before is anyones guess. Lots of times if it s abig company they'll set up a 12 month payment schedule for the pre bankruptcy money so you may get all of it.

    best thing to do is call the trustee and get a new signed contract with him/her or have them sending you something in writing agreeing to the contract. if you have the money it may be worth to hire a lawyer if that does not work.
     
  6. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    Ask your attorney.
     
  7. CityGuy

    CityGuy PlowSite Fanatic
    Messages: 16,995

    Try and see if you can get named in the bankruptcy then at least you have a chance at getting some of the incurred costs back. More than likely not all but you should get some.
     
  8. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,868

    I give up. :dizzy: :eek: xysport :realmad:
     
  9. EJK2352

    EJK2352 Senior Member
    Messages: 192


    No way. You will be lucky if you see one dime from this account. I have a friend that was in a similar situation, and he has not seen any payment in over two years.
     
  10. procut

    procut Senior Member
    Messages: 902

    Chances are your probably SOL, I've had a few customers that owed me $$ file bankrupcy, and I never saw anything. Each time it was for a few hundred dollars, so I never really persued it any, though.
     
  11. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,504

    Why would you keep servicing them if they owe you that much money? Hopfully you will see something, but don't keep working for free.
     
  12. RODHALL

    RODHALL Senior Member
    Messages: 374


    this is correct... If you can get the trustee to reconfirm the contract. then you can keep plowing and will get paid for all previous work in time. you'll not get the % for late fees, but still.

    If the trustee say no then your more then likely out of the money owed also.
     
  13. rblake

    rblake Senior Member
    from dayton
    Messages: 291

    Several years ago i started work at a company that went into chapter 11. my contact told me one day to invoice this months and next months work by a certain date. I didnt ask questions. I got paid and then recieved paper after paper from the courts. We kept on taking care of the place and never had a problem. Good luck