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Chapter 11 Bankruptcy

Tuesday, June 28, 2016

What Does That Really Mean? Common Bankruptcy Terms Explained


What Does That Really Mean? Common Bankruptcy Terms Explained 

When the attorneys at our firm talk with someone who is thinking about filing bankruptcy, or someone who is already going through the bankruptcy process, we try to talk like normal humans rather than the legal mutants we are.


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Tuesday, July 14, 2015

Former Adams Produce Owner Under Fire, Facing Criminal Charges

Is it possible that criminal charges will result from information obtained in bankruptcy proceedings?

 

In 2010, Adams Produce, a large family-owned company with a long history in Birmingham, was sold to a group of investors. Just two years later, in 2012, the company filed for bankruptcy and closed.  Four hundred employees were left without jobs and the company owed the employees almost three weeks back pay.  The company also owed almost $16 million to vendors, creditors, and produce suppliers.  The company blamed decreasing margins and lawsuits from rival companies in the bankruptcy filing.  Once the company filed, the United States government cancelled a recently signed, four and a half year contract for produce worth $41 million.    

Prior to the sale and bankruptcy, the family-owned business brought in outside managers to lead the business.  The family eventually sold ownership stakes to the outside CEO, CFO, COO, and an investment firm, CIC Partners.  The bankruptcy and closing impacted the original family, specifically Carl Adams III who claimed that he lost $5 million and suffered emotional and physical damage as a result of the company’s failure.  Adams was forced to return to the workforce and forgo retirement while watching his family business shut down.  Adams blamed the company’s former CEO and CFO, for most of the problems associated with the closing and bankruptcy.  

Former CFO John Stephen Alexander had insight into the company’s finances and did not inform CIC of the issues that Adams Produce faced. Adams claimed the CFO had a duty to report the fraud in the government contract and was guilty of duping people into buying into a failing company along with the CEO. Alexander was sentenced on separate fraud charges and served a prison sentence related to those charges.

If you believe that you have done something illegal and are now considering filing for bankruptcy, you should speak to an experienced attorney before making your next move.  The attorneys at Padgett and Robertson have extensive experience helping companies in the Mobile and Baldwin County areas navigate bankruptcy proceedings.  Contact us today at (251) 342-0264 for a free consultation.      


Thursday, May 21, 2015

Article 9 Repo Sales Gaining Popularity

What are alternatives to Chapter 11 Bankruptcy?

Recently creditors’ seeking to dispose of the assets of a delinquent borrower through Article 9 of the Uniform Commercial Code instead of in Bankruptcy court has become a popular procedure.  To repossess encumbered assets and sell them under the UCC, a creditor only has to perform a lien search, notice the interested parties, and conduct the sale.  The process can take as little as thirty days, unlike sales through the bankruptcy code, which require court approval, include additional legal fees, and take at least sixty days to complete.  This method of collection is comparable to a foreclosure sale, although Article 9 of the UCC is not applicable to real estate.  A creditor whose loan is connected to specific collateral, such as a car loan, may repossess that property, provide notice to other parties, and sell it without court approval, if that loan is delinquent.  There are different means for repossession, but almost all of them involve less legal fees than a Chapter 11 Bankruptcy.

Often times, debtors will opt to use Article 9 of the UCC instead of filing bankruptcy, because it saves them time and money as well.  Scott Kay, Inc., a jewelry manufacturer chose to do it earlier this year.  In March of 2015, an Alabama furniture manufacturer that defaulted on its debts had its equipment seized and sold by the creditor.  The equipment went to a different manufacturing plant in the same town, which is now thriving.  In another individual case, the assets of a defunct company were purchase by a coalition of former employees who used the equipment purchased to restart the company and keep their jobs.  

There are many ways in which an Article 9 sale can be beneficial to a Bankruptcy action, but each case is different and only an attorney can help determine what the best course of action is for each individual case.  The experienced Mobile and Baldwin County, Alabama bankruptcy attorneys at Padgett & Robertson will assist you in determining the best course of action for your financial future.  Call (251) 342-0264 today to schedule an appointment.

 


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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