BANKRUPTCY - PERSONAL AND BUSINESS

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Personal Bankruptcy – Chapter 7 and 13

 

Chapter 7 bankruptcy is for individuals whose debts exceed their abilities to repay.  Generally this is because they have limited disposable income.  In most cases the debt is “consumer” debt meaning credit card debt, large medical bills or personal loans.  In other cases, the debts may be “non-consumer” debt arising from personal guarantees on business loans. The end result is a bankruptcy discharge of qualifying debt.  At the end of the process, Chapter 7 debtors obtain a “fresh start.”

 

Chapter 13 bankruptcy is for individuals who have income and could manage their debt if they had a payment plan.  The reason for the filing is because they could not service their debt as it came due and therefore fell behind.  Ultimately the bankruptcy plan will enable them to catch up on payments and pay off delinquent liabilities thereby improving their overall financial well-being. 

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Corporate/Business Bankruptcy – Chapters 11 and 7

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Chapter 11 bankruptcy is for businesses to either reorganize or liquidate their assets in order to repay debt. Most of the time, a Chapter 11 filing results in a reorganization. One of the advantages of filing a Chapter 11 petition is that Debtors can choose to cancel unfavorable contracts such as onerous leases or management agreements.  Debtors have the exclusive right to propose plans of reorganization for a limited time after which creditors may do so.  In order to make the plan effective, a statutorily prescribed percentage of the creditors have to vote to approve the plan. Businesses may also file for bankruptcy under Chapter 7, but the end result is the dissolution of the entity instead of reorganization.

 

Individuals can file under Chapter 11, but since this chapter is more complicated and generally costly, most opt for a Chapter 7 or 13 bankruptcy.

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General Differences Between Business and Personal Bankruptcy

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One of the big differences between personal and business bankruptcy is the means test. If an individual’s debt is “consumer” debt, they have to participate in this test to determine if they are eligible for a Chapter 7 or a Chapter 13, while businesses do not have to prove this for a Chapter 11 or 7 filing.

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LITIGATION

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As litigators, we represent clients in federal, bankruptcy and state court proceedings at both the trial and appellate levels, as well as in alternative dispute resolutions (arbitration or mediation). Our clients include corporations, entrepreneurs and individuals.  Among the matters we litigate are cases arising out of debtor-creditor relationships, commercial tort, fraud and contract actions.

 

We tenaciously pursue remedies for our clients and tirelessly defend claims against our clients. But we also understand that litigation arises within a business context. Our attorneys have the experience and business acumen to analyze sophisticated transactions or business disputes and devise strategies that maximize benefits and minimize exposure for our clients.

 

We are proud of the many important, precedent-setting successes we have achieved for our clients over the years. And we are equally proud to have helped many clients to avoid protracted litigation through appropriate counseling, sound advice and negotiation.

 

We are experienced in handling a wide spectrum of disputes, including, among other areas:

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Business Dissolutions

When business relationships such as joint ventures or corporations face disputes or dissolution, individuals and corporations need representation to protect their interests in the existing business and to go on to establish new ventures. The firm has successfully represented parties involved in business relationship disputes in the courts as well as reaching negotiated settlements so as to avoid the need for litigation.

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General Commercial and Corporate Matters

We represent shareholders and partners in all types of disputes and litigation, including:

corporate and partnership law; officer and director liability and shareholder derivative actions

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Real Estate Litigation

We understand the steps necessary to successfully litigate real estate matters, and are able to avoid pitfalls that may prevent a party enmeshed in a real estate dispute from successfully protecting its position or pursuing remedies. 

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TAX

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As tax lawyers, we provide comprehensive tax advice and representation to a broad spectrum of domestic and international clients.

In every case, our goal is to achieve the optimal tax treatment consistent with our clients' business and personal objectives. We make it a priority to keep abreast of changes in this continually evolving field

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General Corporate and Business Law

• Counseling clients on entity selection, with an eye toward limiting tax costs, achieving civil liability insulation, and preserving tax attributes.

• Advising clients on the use of family limited partnerships, limited liability companies (LLCs) and other estate and succession planning vehicles for business interests and real property.

• Structuring business and investment transactions to maximize tax efficiencies.

• Negotiating and drafting agreements with tax implications, including shareholder agreements for C corporations and S corporations and indemnification agreements.

• Negotiating and structuring partnerships and LLCs, including preparing allocation, distribution, liquidation and other provisions.

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