Bankruptcy & Reorganization
The bankruptcy practice at YK Law has represented multiple small businesses, creditors, and debtors in Chapters 7, 13, and 11, adversarial proceedings, and creditors proceedings in the Southern and Eastern Districts of New York.
Our experience also includes issues involving complex bankruptcy litigation.
Bankruptcy and Your Small Business
We know you have worked long and hard to make your business succeed. Even with the best attempts, small businesses face many challenges they simply have no control over. If your small business needs to file for bankruptcy, we have a tailored approach to help you move beyond the financial stigma into the next phase of your life and business.
But at YK Law, we don’t jump right into bankruptcy proceedings. Our initial approach is to assist your business in debt settlements and negotiation with creditors in an effort o avoid bankruptcy. This is done through direct contact with creditors, litigation, and funding and financing assistance to enable your business to consolidate debt. If these attempts are unsuccessful, The debtor and business assets and liabilities are analyzed and the business is matched with the appropriate Chapter under the Bankruptcy code; Chapter V (small business streamlined reorganization), a full Chapter 11 reorganization or a Chapter 7 liquidation.
Handling Creditor Claims
Our team can assist with securing all interests of creditors dealing with a debtor in bankruptcy including:
- Analyzing the claim
- Assessing its priority
- Creditor committees
- Creditor motions and bankruptcy litigation
- Relief from automatic stay
- Appointments of trustees
- Adversary proceedings
Your Rights as a Debtor in Bankruptcy
As a debtor, you have the right to an automatic stay of all creditor collection efforts. In addition, you can cram down certain eligible debts, liquidate and/or reorganize debt and either close down your business or revitalize it for a fresh start.
How Chapters V, 7, 13, and 11 Are Most Often Used
Chapter V bankruptcies are called the ‘mini Chapter 11’ for debtors who meet certain criteria and debt thresholds and offers small business debtors a streamlined and low-cost alternative to a Chapter 11 reorganization.
Chapter 7 filings are designed for the debtor with assets to liquidate for the benefit of creditors and obtain a discharge of debt that cannot be satisfied by funds raised through such liquidation. For individuals with debt but no assets or income Chapter 7 can offer a discharge of debts and a fresh start.
Chapter 13 filings are designed for the individual debtor with regular income that needs to reorganize debt, expunge certain liens, and discharge any personal liability. Chapter 13 filings usually involve the debtor entering a 5-year plan for the benefit of creditors. While in bankruptcy we can assist with home retention, litigation, debt negotiations, loan modification and other debt solutions.
Chapter 11’s are business reorganizations which involve a myriad of business issues to assist the debtor to maintain ownership of the business and enable it to continue operations.
We have also handled individual Chapter 11 cases where the individual has debt in excess of $1 million.
Preparing for Adversarial Proceedings
Our team is experienced in representing debtors and creditors in adversary proceedings in bankruptcy court and can assist with all aspects of bankruptcy court litigation.
Complex Bankruptcy Litigation
The bankruptcy lawyers at YK Law have assisted many business and individual clients with extremely complex bankruptcy litigation including:
Type of Client: Small business debtor In possession of multi-unit commercial building in Brooklyn
Client’s Issue: To retain ownership or possession and to negotiate with its secured, priority and unsecured creditors and save the property from public auction.
Your Approach: After we conducted a debt priority and waterfall analysis, it was determined that the debtor could not effectively pay its creditors on its own. We arranged for DIP financing and cash infusion from a third-party investor, raised sufficient capital to short pay creditors claims, administration fees and expenses, commissions and the like to the satisfaction of the US bankruptcy Judge. As part of the deal we negotiated a long-term discounted lease for the client so that he could continue operating his business from the property.
Result: We engaged in litigation and filed multiple complex motions to avoid the secured creditors self-liquidating plan and auction and were able to have our novel investor bail out and financing plan confirmed.
Type of Client: Small business/amazon retail store
Client’s Issue: Client filed a Chapter 7 liquidation with prior counsel but was facing an adversary proceeding and litigation claiming fraud.
Your Approach: Represented client in Section 2004 depositions and defended the adversary proceeding, analyzed assets, fraud claim and petition filing and created a strategy to defend client and take its bankruptcy case to conclusion.
Result: Assisted client in successfully negotiating with the creditor Plaintiff, aggressively represented client in the bankruptcy litigation, negotiated and resolved creditors claim to allow debtor to obtain a discharge.