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Overview In this bankruptcy case study, we are going to analyze the financial situation for Ms. L., who resides in Chicago. She resides on Woodland Park Avenue of the East side of the city. She filed a chapter 13 bankruptcy back in 2006. Thus, she is eligible for either a chapter 7 bankruptcy case or+ Read More
The post This Is The Bankruptcy Case Study For Miss L., Living In Chicago appeared first on David M. Siegel.

Many California businesses are highly successful endeavors. However, for every successful business, there are a number of businesses that do not take off in the way their founders or investors envisioned. The lack of sustained commercial success is typically not for a lack of effort, hard work, or vision. The simple fact is that sometimes projections and models do not pan out and despite all efforts to keep the business afloat, it may nevertheless begin to take on significant debt that can hinder day-to-day operations.  
In California, businesses or non-profits have numerous options to handle debt. While bankruptcy is the traditional method of dealing with excessive debt, other options exist. In certain situations, it may make sense to simply dissolve the non-profit, business, or other entity. The Sacramento bankruptcy attorneys of The Bankruptcy Group can help business owners or managers of a non-profit assess the situation the entity faces and make an appropriate decision regarding how to handle debt.
What Is a California Business Dissolution?
For certain entities, including non-profit entities, it may be prudent to explore additional state law remedies to address debt and debt situations. One of these potential state law remedies available in California is a dissolution under state law. In California, a dissolution of an entity can be voluntary or it can be involuntary.
A voluntary dissolution in California is a step that the directors and other controlling parties of a non-profit organization can elect to take. Nonprofits can be dissolved for nearly any reason or for no reason at all.  In fact, an entity can be dissolved without any input from the courts. However, in certain scenarios, one or more interested parties may petition a California court to oversee and supervise the process of winding down and dissolving the entity.

The exact process regarding how a non-profit or other entity should proceed comes down to the current facts and circumstances in the matter. In certain situations, most commonly where creditors of the organization exist, certain directors or board members may need to approve the dissolution. It is also necessary to consult with any governing documents concerning the entity when determining the correct method of winding down the entity through a voluntary dissolution.
Can a Dissolution Be Forced or Involuntary in California?
Certain interested parties may bring about an involuntary dissolution case in an array of circumstances. Interested parties that can start involuntary dissolution proceedings include:

• 50-percent of the non-profit or entity’s board of directors
• One-third of all members vote to bring about dissolution proceedings
• Any party authorized to commence involuntary dissolution in the organization’s bylaws or governing documents
• The California state attorney general

The impact of an involuntary dissolution proceeding is significant. While the process bears a certain resemblance to a straight bankruptcy under Chapter 7, it is a distinct legal proceeding. However, in comparison to the bankruptcy process, even an involuntary dissolution can provide for more flexibility and may present a viable option when parties are still able to negotiate and work together. Once the dissolution process begins, the entity is under an obligation to wind down operations while settling debts and obligations through a liquidation of its assets.
How Do I Know if a Bankruptcy and Dissolution Are Right for a Nonprofit?
When a non-profit begins to experience financial stress due to excessive debts and obligations relative to the organization’s revenue, directors, and managers may be called upon to make difficult decisions regarding the future of the business. While both bankruptcy and dissolution under state law can produce the end result of a liquidated entity, laws regarding the treatment of debt and creditor claims varies significantly.

Consider that the bankruptcy process comes with certain protections and powers that are not available in a dissolution. That is, the automatic stay can stop creditor collection attempts and the entity has certain powers to avoid certain contracts or transactions to facilitate settling its debts. These powers and protections are not available in a dissolution proceeding. In exchange for the lack of these powers, there is greater flexibility in a dissolution. Furthermore, parties can avoid the involvement of a court in the finances and day-to-day affairs of the entity.
Work with Non-Profit Business Dissolution and Sacramento Bankruptcy Attorneys in California
If your non-profit business or other entity has run into financial difficulties, the most prudent path forward may be a liquidation of the entity’s assets. However, the approach the responsible parties take regarding the liquidation can have profound impacts on the overall disposition of the debts and obligations. The Sacramento bankruptcy lawyers of The Bankruptcy Group can help you and your non-profit business determine which path is likely to provide a prudent means to move forward. To schedule a confidential consultation, call 1-800-920-5351 or contact us online today.
The post Should a Troubled California NonProfit File Bankruptcy or Wind Down through a Dissolution? appeared first on BK Law.

The easily availability of consumer debt in the United States (U.S.) has significantly increased debt amounts by more consumers, especially those with low to moderate income. This makes these families and individuals most vulnerable to financial difficulties when they suffer income interruptions or emergency expenses when it comes to staying a float debt payment
The post Consumer Debt and Bankruptcy: Your Options appeared first on Tucson Bankruptcy Attorney.

Earlier this year, I helped a client purchase real property out of a chapter 11 California bankruptcy case.  The process can be confusing and stressful, but it is worthwhile for a potential buyer who has found the right real property and is willing to pay above and beyond what the next best offer is in the bankruptcy case.  It’s even more confusing for a potential buyer when real estate is being transferred as part of a third party settlement in a bankruptcy proceeding,  and an outside buyer wants to come in and overbid on the real estate to provide more value to the bankruptcy estate than the settlement offers.
Now while a buyer of real estate just wants to buy the real estate and wants nothing to do with a third party settlement between the Debtor and other creditors, it is important one understand the settlement matters because the real estate is involved in the settlement.  So the settlement can’t be ignored and it’s not as simple as just buying a piece of real property outright by necessarily offering more money.
Here’s the standard to determine whether the settlement can be approved:  In determining whether a settlement is fair and equitable where disposal of estate property is contemplated, the Court must consider the possibility of a higher sales price obtained through a competitive process as part of a § 363 sale.  (March, Ahart & Shaprio,CAL. PRAC. GUIDE: BANKRUPTCY (TRG 2014),§ 20:302)( citing to In re Mickey Thompson Entm’t Group, Inc., 292 B.R. 415 at 421-422 (B.A.P. 9th Cir. 2003).
Whether a Court should “impose formal sale procedures is ultimately a matter of discretion that depends upon the dynamics of the particular situation.”  Id. at 422.  The Debtor in Possession, wherein no trustee has been appointed, nonetheless has a fiduciary duty to maximize the value to the estate over any agreement that requires court approval.  Id. at 421.
So this all means a bankruptcy court should consider whether a settlement is fair and equitable and in doing so must consider a higher sales price offered by someone such as a third party buyer for the real estate.  Ultimately, a court has some leeway in determining the multitude of factors, and the Court must make considerations that best benefit the bankruptcy estate.  This is a concept sometimes that gets lost in the weeds.  The Court must do what’s best for the bankruptcy estate, not just what’s best for a buyer or a seller, or another third party, or even the Debtor.  The bankruptcy court has the tough task of balancing all these factors and weighing them against the interests of differing parties with different agendas.
In my case in which I helped my clients purchase acres of real property, my client presented an offer valued higher than what the settlement in the bankruptcy offered as value for the real property.  However, our offer required financing and was not an outright cash offer.  The problem is that the Debtor who owned the property in the chapter 11 case structured the process so that only cash offers could be contemplated.  Ultimately, the bankruptcy court made a tough call in this case where both parties could not agree on this point.  The court determined that if my clients offered a non-refundable substantial good faith cash deposit, it would allow us to move forward coupled with a very short closing window to get everything completed and funded.  If my clients failed to fund, the deposit would be lost and the bankruptcy estate would have a extra money to administer the estate than it previously did and could move forward with its settlement as proposed.
Ultimately, my clients were able to close the deal and are now owners of the real estate they coveted.  Who would have thought the world of bankruptcy would have best provided them with this unique opportunity?
JCH Law Firm has experience dealing in these matters.   Attorney Jeff Hsu is a California state certified bankruptcy specialist & attorney.  We have successfully represented clients in bankruptcy cases of various shapes and sizes.   Give us a call at 626-999-5959 or email us your inquiry at [email protected].   Thank you and we look forward to hearing from you.
 
The post The Art of Bidding at 363 California Bankruptcy Sales Involving Settlement Offers appeared first on JCH LAW FIRM.