Businesses can face financial difficulties for a variety of reasons. In some instances, filing for bankruptcy may be the business owner’s best or only option. Depending on the business’ financial situation and the desires of the business owner, there are a number of bankruptcy options. It’s recommended that an individual consult with an attorney as soon as it appears that bankruptcy may be an option because an attorney may be able to help determine which course of action makes the most sense in the particular situation. If a business owner wants to cease operations and completely liquidate their business, a Chapter 7 bankruptcy may be an option to consider. In a Chapter 7 bankruptcy, a trustee will be appointed to sell all of the company’s assets. The monies received as a result of the sale of assets will be used to pay the creditors of the bankrupt business. Chapter 7 bankruptcies are most commonly used for small businesses and sole proprietors. A Chapter 11 bankruptcy allows a financially struggling business the opportunity to continue operations under a plan of reorganization. In a Chapter 11 bankruptcy, the debtor and creditors will negotiate a reorganization plan that allows the business to continue operating… Continue reading
Norse Energy Corporation, a company based in Oslo, Norway, terminated its remaining New York employees and closed its New York operations after converting from Chapter 11 to Chapter 7 bankruptcy. Norse blames the bankruptcy on the state’s many local bans and moratoriums and especially the statewide ban on hydraulic fracturing, or fracking. The statewide fracturing moratorium, which only applies to high volume fracturing and horizontal drilling, has been in place since 2008. According to the Schlumberger Oilfield Glossary, hydraulic fracturing is routinely used to stimulate oil and natural gas production by enhancing the permeability of rock formations. Norse contends that when the state banned high volume hydraulic fracturing, the company became unable to operate profitably. In an attempt to raise money for debt settlement, Norse tried to sell its leases and pipeline rights for 130,000 acres, but the company was unsuccessful. Of the dozens of bans on oil and gas production in NY, Norse is challenging one: a ban in Dryden. This case is currently before the New York Supreme Court. In addition, Norse is fighting a lawsuit brought by the owners of 6,000 of the leased acres. For families and companies like Norse that are facing financial crises, Chapter… Continue reading
Suntech Power Holdings, which is a Chinese-owned company that is registered in the Cayman Islands, was placed in involuntary Chapter 7 bankruptcy after U.S. investors petitioned the southern district court of New York. The petition came as a result of unpaid convertible notes amounting to $1.6 million. The notes were due the end of 2013 and remained unpaid. This prompted the U.S. investors to file the bankruptcy petition. However, recent negotiations with the note holders resulted in an announcement Friday that Suntech will be dismissing the Chapter 7 filing. Instead, they will be filing Chapter 15 bankruptcy in the company’s Caribbean base. This will allow the company to remain in business while proceeding with liquidation and restructuring as regulated in the U.S. bankruptcy code. If Suntech does not file for Chapter 15 by the allotted time, which is Feb. 25, the agreement will be void. The Chapter 15 filing will result in recognition of the restructuring in the Cayman Islands to be entered into the U.S. Bankruptcy Court. The deadline for that recognition to be filed in the U.S. Bankruptcy Court is May 31, with a Dec. 31 approval date. Bankruptcy attorneys in New York can tell you that Chapter… Continue reading
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