fbpx

Take some of the mystery out of bankruptcy

More often than ever before, bankruptcy cases are affecting businesses and consumers, yet little is shared about what should be done to protect their rights.

SFBW spoke with attorney Charles M. Tatelbaum, Florida Director of Tripp Scott, who focuses his practice on bankruptcy and creditors” rights, as well as complex business litigation. He is a national Certified Specialist in Business Bankruptcy Law by the American Board of Certification, accredited by the Florida Bar.

SFBW: My company delivered goods on credit to another business that just filed for bankruptcy. What can I do?

Tatelbaum: The vendor may seek to have any remaining goods delivered within 45 days prior to the filing of the bankruptcy returned, or the vendor can file for an administrative priority claim (which elevates the claim in the payment hierarchy) for goods delivered within 20 days prior to the bankruptcy. In both instances, immediate action must be taken.

SFBW: If my company has goods in transit to a customer that files for bankruptcy, can I stop the goods from being delivered?

Tatelbaum: Absolutely.

SFBW: Is my business protected if it provides goods or services on credit to another business that is in Chapter 11?

Tatelbaum: While creditors that extend credit to a debtor-in-possession operating under Chapter 11 are entitled to administrative priority status, if the debtor runs out of cash, the priority status becomes meaningless.

SFBW: What is a bankruptcy preference or clawback?

Tatelbaum: Any transfers made by a debtor within 90 days prior to filing bankruptcy may be recovered or “clawed back” by a debtor-in-possession or trustee within two years of the filing of the bankruptcy. There are many statutory defenses available to creditors, and one should not automatically acquiesce to a preference or clawback demand.

SFBW: Should I or my business file a proof of claim immediately upon learning that a customer has filed bankruptcy?

Tatelbaum: No. The filing of a proof of claim subjects the creditor to the jurisdiction of the bankruptcy court wherever it is located. Before filing a proof of claim, it is important to determine if you or your business may be subject to a preference or other clawback recovery. If so, it may be prudent to withhold filing a proof of claim until it can be determined if the contemplated distribution to creditors is so small that it will be better for you not to file a proof of claim in order to retain all jurisdictional rights in the event of a clawback action.

SFBW: What do I do if I have a contract with a company that has filed a Chapter 11 case?

Tatelbaum: Debtors in Chapter 11 (and trustees in Chapter 7) can unilaterally reject ongoing agreements where there is continuing performance, such as leases, franchises, supply agreements, distribution agreements, etc. Counterparties to these agreements have many rights and remedies when a contract is to be rejected, and care must be taken to protect these rights and remedies.

SFBW: What is the difference between a Chapter 7 and Chapter 11 bankruptcy case?

Tatelbaum: In Chapter 7, a business or the assets of an individual are liquidated by a trustee, with distributions made to creditors. In Chapter 11, the business or an individual can seek to reorganize (or liquidate in an orderly manner), and a plan is proposed which is voted on by creditors to deal with the claims of creditors. ?

Contact Tatelbaum at CMT@trippscott.com or 954.525.7500.

You May Also Like

Pride Week Festival Begins With Tribute to Pulse Nightclub Survivor

Miami Beach Pride’s week-long festivities will commence with a special tribute to the LGBTQ+ community honoring the victims of the tragic shooting at Pulse Nightclub in Orlando. A ceremonial “flip

Surfside luxury condo sees notable sales

Arte at Surfside is making waves. There’s, of course, the news that Ivanka Trump and Jared Kushner are renting at the 16-resident luxury condominium. And there’s the December penthouse sale

Up in the Air: A Discussion

In a dynamic region where residents are typically on the move, everyone is wondering about the health of the airline industry and the safety of airports and airplanes. Everyone is

South Florida Yachting Legend Passes

Robert “Bob” Roscioli, an icon in the South Florida marine industry, has passed away. Many recognize the name Roscioli from the widely-successful and world-renowned Roscioli Yachting Center, a full service

Other Posts

Four key steps

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] What a crazy time we are all experiencing. Right now, getting back to basics is most important. It is not and

Pandemic adds to worries about hurricane season

An above-normal 2020 Atlantic hurricane season is expected, according to forecasters with NOAA’s Climate Prediction Center, a division of the National Weather Service. The outlook predicts a 60% chance of

The difference between leading and managing

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] Leadership and management are often misunderstood as one in the same. They are not. Certainly, a good leader should be able

Flattening the housing curve in a pandemic

By Josh Migdal In the classic film Groundhog Day (and yes, it is a classic), Bill Murray’s character wakes up over and over again in Punxsutawney, Pennsylvania, reliving the same

Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.