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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.
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.
What goes into a blog post? Helpful, industry-specific content that: 1) gives readers a useful takeaway, and 2) shows you’re an industry expert.
Use your company’s blog posts to opine on current industry topics, humanize your company, and show how your products and services can help people.
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.
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.
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.
Do Chapter 13 payment plans really work? How many customers actually finish the plan and become debt free? How does it stack up to other options like consumer credit repayment plans? If you don’t know how likely a plan of action will succeed, how do you know what to do?
Historically, only one in three chapter 13 cases are completed nationwide. That is a pretty bad success rate in my opinion. Law professor Katherine Porter (@bankruptprof) wrote a provoking article about chapter 13 success rates in 2011 that basically called for an elimination of chapter 13 cases. Her study confirmed the dismal success rate of these cases.
Chapter 13 is a pretend solution. I use this term to mean a social program that does not work as intended but is not critiqued or reformed because its flaws are hidden.
That study always struck me as wrong. It seemed wrong because we were achieving a much higher success rate in Nebraska and in our firm’s cases. It seemed wrong because chapter 13 has so many advantages over chapter 7 that allow debtors to stop foreclosures, retain work vehicles and basically even the playing field against big bill collectors.
So I began to review success rates of bankruptcy cases and other debt solutions. In reviewing the 283 Chapter 13 cases our firm filed in 2011, our clients obtained chapter 13 discharges in 198 of those cases. That is a 70% success rate! Chapter 7 success rates are even higher. Of the 321 chapter 7 cases our firm filed in 2011, clients received discharges in 320 cases. That is a 99% success rate.
Bankruptcy Judge Brian D. Lynch reports a similar success rate for cases filed in the bankruptcy court for the the Western District of Washington. (See Measuring Success in Chapter 13) Another study by Ed Flynn of the American Bankruptcy Institute (Chapter 13 Revisited) revealed a nationwide chapter 13 completion rate of 50% for confirmed cases.
HOW DOES CHAPTER 13 STACK UP TO OTHER DEBT SOLUTIONS?
It is important to know the average success rate before starting a debt program. Here is what our studies indicate:
- Chapter 7. Nationally, about 95% of chapter 7 cases complete successfully.
- Chapter 13. It varies a lot from state to state and from law firm to law firm. Success rates vary from 40% to 70%.
- Credit Counseling Payment Programs. This is a hard figure to track since the credit counseling industry does not publicly report their success rate. But industry insiders report success rates of 20% to 25%. (See this article: Does Credit Counseling Work?)
- Debt Settlement. The “save-up-and-settle” programs are basically a scam with success rates well under 10%.
- Dave Ramsey Debt Snowball Plan. There is absolutely no reliable information about the success rate of these programs. I would estimate that only about 1 in 3 of those folks who begin this program become debt free.
WHY DO SOME BANKRUPTCY FIRMS HAVE HIGHER SUCCESS RATES?
Success is no accident. Some attorneys just work harder at it and have a higher commitment rate to clients. In every chapter 13 case there comes a time when a client needs help. Clients get injured and they lose jobs or go through divorce and they face many other problems that can cause a payment plan to fail. Successful chapter 13 attorneys have many tools to help clients through temporary problems:
- Motion to Suspend Payment. From time to time a debtor may ask the court to stop or reduce the bankruptcy payment if good cause exists.
- Amended Plans. When income decreases due to lower paying jobs or expenses increase due to medical problems, the original plan may be amended to make the payment affordable. Skilled attorneys know how to adjust payments when circumstances change.
- Home Loan Modifications. Chapter 13 can stop a home foreclosure and give a homeowner extra time to modify their home loan. When home loans are modified the monthly bankruptcy payment can be lowered typically.
- Referrals to Tax and other professionals. A good chapter 13 attorney can refer clients to other skilled professionals. Perhaps a client needs great accountant to prepare tax returns. Perhaps a good real estate agent is needed. Getting clients to the right professional help is key.
- Understanding the Real Cause of Financial Problems. Money problems are often secondary. Listening to your client and helping guide them through difficult times can make a real difference.
Does chapter 13 work? The evidence is overwhelming. In the hands of a skilled attorney, chapter 13 is a very real debt solution.
If you have been struggling with debt, now may be the best time to consider filing for bankruptcy. For starters, with the holidays ahead you could dig yourself deeper into debt. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, lists four reasons why you may want to consider filing for bankruptcy before the holidays.
4 Reasons To File an Elkhorn, Wisconsin Bankruptcy Before the Holidays
1. Stop accruing more debt during the holiday season. You are already in debt. The last thing you need is even more debt. Family dinner ingredients, travel expenses, and gifts can put you past the point of no return. If you file bankruptcy before the holidays, you won’t use your credit cards to pay for holiday expenses and gifts. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, wants to remind you that paying for holiday gifts on your credit cards may prolong or prevent you from filing bankruptcy. The bankruptcy trustee may think you purposely racked up credit bills for fraudulent reasons. You may not get these charges discharged.
2. Stop embarrassing phone calls while hosting family, guests, and holiday parties. The last thing you want happening while entertaining family and friends is for your phone to be ringing off the hook with bill collectors on the other end. Not only is this situation embarrassing, but it is also depressing. The holidays are hard enough without being reminded about your financial problems. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, wants you to know that as soon as you file for bankruptcy, all collection attempts must stop, including letters and phone calls. So, you won’t have to hide your mail during the holidays, either.
3. Start budgeting now, before spending even more on holiday items. Budgeting isn’t fun, but it is important. With the holidays approaching, you may be considering spending money on decorations, food, and gifts. Can you even afford all of this right now? Start a budget now while filing for bankruptcy to keep your finances in check.
4. Start 2017 with a clean slate. Wouldn’t it be great to start the new year debt free? Think of the great New Year resolutions you can make regarding your spending habits. No more collection attempts. The New Year is the perfect time to start rebuilding your credit. It’s a second chance for a fresh start.
Contact Our Elkhorn, Wisconsin Bankruptcy Lawyer, Shannon Wynn
If you are dreading the holiday season because of your financial situation, give us a call. Don’t put yourself further into debt. Don’t ruin your chances of ever being able to file for bankruptcy by racking up more credit card debt during the holidays. Now is the perfect time to strategize wisely about your finances. Before the holiday bills hit you like a freight train, contact our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn. You can schedule a free, initial consultation by calling our bankruptcy office at 262-725-0175 or by stopping one of our offices in Delavan, Muskego, Salem, or Lake Geneva.
Find out if you qualify for bankruptcy.
Click Here to Get a Free Bankruptcy Assessment
from Wynn at Law, LLC
.
It’s Free. It’s Easy.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
If you have been struggling with debt, now may be the best time to consider filing for bankruptcy. For starters, with the holidays ahead you could dig yourself deeper into debt. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, lists four reasons why you may want to consider filing for bankruptcy before the holidays.
4 Reasons To File an Elkhorn, Wisconsin Bankruptcy Before the Holidays
1. Stop accruing more debt during the holiday season. You are already in debt. The last thing you need is even more debt. Family dinner ingredients, travel expenses, and gifts can put you past the point of no return. If you file bankruptcy before the holidays, you won’t use your credit cards to pay for holiday expenses and gifts. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, wants to remind you that paying for holiday gifts on your credit cards may prolong or prevent you from filing bankruptcy. The bankruptcy trustee may think you purposely racked up credit bills for fraudulent reasons. You may not get these charges discharged.
2. Stop embarrassing phone calls while hosting family, guests, and holiday parties. The last thing you want happening while entertaining family and friends is for your phone to be ringing off the hook with bill collectors on the other end. Not only is this situation embarrassing, but it is also depressing. The holidays are hard enough without being reminded about your financial problems. Our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn, wants you to know that as soon as you file for bankruptcy, all collection attempts must stop, including letters and phone calls. So, you won’t have to hide your mail during the holidays, either.
3. Start budgeting now, before spending even more on holiday items. Budgeting isn’t fun, but it is important. With the holidays approaching, you may be considering spending money on decorations, food, and gifts. Can you even afford all of this right now? Start a budget now while filing for bankruptcy to keep your finances in check.
4. Start 2017 with a clean slate. Wouldn’t it be great to start the new year debt free? Think of the great New Year resolutions you can make regarding your spending habits. No more collection attempts. The New Year is the perfect time to start rebuilding your credit. It’s a second chance for a fresh start.
Contact Our Elkhorn, Wisconsin Bankruptcy Lawyer, Shannon Wynn
If you are dreading the holiday season because of your financial situation, give us a call. Don’t put yourself further into debt. Don’t ruin your chances of ever being able to file for bankruptcy by racking up more credit card debt during the holidays. Now is the perfect time to strategize wisely about your finances. Before the holiday bills hit you like a freight train, contact our Elkhorn, Wisconsin bankruptcy lawyer, Shannon Wynn. You can schedule a free, initial consultation by calling our bankruptcy office at 262-725-0175 or by stopping one of our offices in Delavan, Muskego, Salem, or Lake Geneva.
Find out if you qualify for bankruptcy.
Click Here to Get a Free Bankruptcy Assessment
from Wynn at Law, LLC
.
It’s Free. It’s Easy.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
The post 4 Reasons to File Bankruptcy Before the Holidays appeared first on Wynn at Law, LLC.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.