Fighting About Involuntary Bankruptcy Petitions

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<ul><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p><p>Part of the the Commercial Bankruptcy Litigation 2015 Series</p><p>Premier Date: September 8, 2015FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>MEET THE FACULTY*PANELISTSJeff BastBast AmronKirk BurkleyBernstein Burkley, P.C.Adam NachLane &amp; Nach, P.C.FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSMODERATORBeau Hays,Hays, Potter &amp; Martin</p></li><li><p>Practical and entertaining education for business owners and executives, Accredited Investors, and their legal and financial advisors.</p><p>For more information, visit www.financialpoisewebinars.comDISCLAIMER: </p><p>THE MATERIAL IN THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY. IT SHOULD NOT BE CONSIDERED LEGAL ADVICE. YOU SHOULD CONSULT WITH AN ATTORNEY TO DETERMINE WHAT MAY BE BEST FOR YOUR INDIVIDUAL NEEDS*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>CLLA is the leader in providing expertise, insight and results to and for attorneys, credit grantors and their partners in the credit and business communities. For more information, visit www.clla.org. DISCLAIMER: THE MATERIAL IN THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY. IT SHOULD NOT BE CONSIDERED LEGAL ADVICE. YOU SHOULD CONSULT WITH AN ATTORNEY TO DETERMINE WHAT MAY BE BEST FOR YOUR INDIVIDUAL NEEDS*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>ABOUT THIS EPISODE</p><p>*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSIt generally only takes three creditors to sign an involuntary bankruptcy petition. But that is just the first step in trying to force a company to become a debtor in bankruptcy. Attend this webinar to learn about when your client may want to sign an involuntary bankruptcy petition and the risks involved in doing so. This webinar will also discuss what to do if an involuntary petition is filed against your client.</p></li><li><p>EPISODES IN THIS SERIES</p><p>EPISODE #1How to Defeat a Single Asset Real Estate Case5/5/15EPISODE #2Professional Responsibility in Bankruptcy Cases6/2/15EPISODE #3Valuation Fights in Bankruptcy7/7/15EPISODE #4Overview of Fraudulent Transfer Litigation8/4/15EPISODE #5Fighting About Involuntary Bankruptcy Petitions9/8/15EPISODE #6Cash Collateral and DIP Loans10/6/15EPISODE #7Anatomy of Preference Litigation11/3/15*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS(Dates below are premier dates; all webinars also available on demand)</p></li><li><p>Review the Schedules and Statement of Financial Affairs(a) An involuntary case may be commenced only under chapter 7 or 11 of this title, and only against a person, except a farmer, family farmer, or a corporation that is not a moneyed, business, or commercial corporation, that may be a debtor under the chapter under which such case is commenced. </p><p> (b) An involuntary case against a person is commenced by the filing with the bankruptcy court of a petition under chapter 7 or 11 of this title (1) by three or more entities, each of which is either a holder of a claim against such person that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount, or an indenture trustee representing such a holder, if such non contingent, undisputed claims aggregate at least $10,000 more than the value of any lien on property of the debtor securing such claims held by the holders of such claims; FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p><p>DRAFT</p></li><li><p> (2) if there are fewer than 12 such holders, excluding any employee or insider of such person and any transferee of a transfer that is voidable under section 544, 545, 547, 548, 549, or 724 (a) of this title, by one or more of such holders that hold in the aggregate at least $10,000 of such claims; </p><p>(3) if such person is a partnership (A) by fewer than all of the general partners in such partnership; or </p><p> (B) if relief has been ordered under this title with respect to all of the general partners in such partnership, by a general partner in such partnership, the trustee of such a general partner, or a holder of a claim against such partnership; or </p><p> (4) by a foreign representative of the estate in a foreign proceeding concerning such person. FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p><p>DRAFT</p></li><li><p>A creditor holding claims against a debtor may file an involuntary bankruptcy petition only under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the Bankruptcy Code. Under Chapter 7, the debtor's assets are liquidated to pay creditor claims. Under Chapter 11, creditors are paid from the cash flow of the debtor's business.</p><p>*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>One or more creditors files a petition with the bankruptcy courtOnce the petition is filed, the debtor has 20 days to respond to the petitionIf the debtor does not respond, the court will allow the bankruptcy and the debtor will have no choice but to participate. If the debtor does respond, a hearing will be set, and if the judge decides based on the evidence that the petition was filed in good faith and that the debtor is not paying the debts, the judge will order that the bankruptcy go forward. If the judge finds in the debtor's favor, however, he or she will dismiss the case and might require the creditors that filed the case to pay the debtor's costs and fees.</p><p>*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>(c) After the filing of a petition under this section but before the case is dismissed or relief is ordered, a creditor holding an unsecured claim that is not contingent, other than a creditor filing under subsection (b) of this section, may join in the petition with the same effect as if such joining creditor were a petitioning creditor under subsection (b) of this section. </p><p> (d) The debtor, or a general partner in a partnership debtor that did not join in the petition, may file an answer to a petition under this section. </p><p> (e) After notice and a hearing, and for cause, the court may require the petitioners under this section to file a bond to indemnify the debtor for such amounts as the court may later allow under subsection (i) of this section. </p><p> (f) Notwithstanding section 363 of this title, except to the extent that the court orders otherwise, and until an order for relief in the case, any business of the debtor may continue to operate, and the debtor may continue to use, acquire, or dispose of property as if an involuntary case concerning the debtor had not been commenced. FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p><p>DRAFT</p></li><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p><p>DRAFT</p></li><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSIf the court dismisses a petition under this section other than on consent of all petitioners and the debtor, and if the debtor does not waive the right to judgment under this subsection, the court may grant judgment </p><p>DRAFT</p></li><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS(a) The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if (1) the interests of creditors and the debtor would be better served by such dismissal or suspension; or </p><p>DRAFT</p></li><li><p>*FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS(2) (A) a petition under section 1515 for recognition of a foreign proceeding has been granted; and (B) the purposes of chapter 15 of this title would be best served by such dismissal or suspension. </p><p> (b) A foreign representative may seek dismissal or suspension under subsection (a)(2) of this section. </p><p> (c) An order under subsection (a) of this section dismissing a case or suspending all proceedings in a case, or a decision not so to dismiss or suspend, is not reviewable by appeal or otherwise by the court of appeals under section 158 (d), 1291, or 1292 of title 28 or by the Supreme Court of the United States under section 1254 of title 28. </p></li><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS(f) In an involuntary case, a claim arising in the ordinary course of the debtors business or financial affairs after the commencement of the case but before the earlier of the appointment of a trustee and the order for relief shall be determined as of the date such claim arises, and shall be allowed under subsection (a), (b), or (c) of this section or disallowed under subsection (d) or (e) of this section, the same as if such claim had arisen before the date of the filing of the petition. </p><p>DRAFT</p></li><li><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS(a) Except as provided in subsection (b) or (c) of this section, the trustee may avoid a transfer of property of the estate (1) that occurs after the commencement of the case; and </p><p> (2) (A) that is authorized only under section 303 (f) or 542 (c) of this title; or </p><p> (B) that is not authorized under this title or by the court. </p><p> (b) In an involuntary case, the trustee may not avoid under subsection (a) of this section a transfer made after the commencement of such case but before the order for relief to the extent any value, including services, but not including satisfaction or securing of a debt that arose before the commencement of the case, is given after the commencement of the case in exchange for such transfer, notwithstanding any notice or knowledge of the case that the transferee has. </p><p>DRAFT</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONS</p></li><li><p>*beau@hpmlawatl.com</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSbeau@hpmlawatl.comJames (Beau) W. Hays, is a principal in Hays Potter &amp; Martin LLP, has acted as lead counsel in litigation matters, specializing in commercial disputes and bankruptcy law for over twenty years. He has successfully prosecuted federal Miller Act cases and bankruptcy creditors cases in federal and state courts around the country.</p><p>In 1995, with HPM partner Emory Potter, Mr. Hays founded the commercial law firm of Hays &amp; Potter, PC, which was recognized nationwide as a pre-eminent source of counsel and expertise in service of the business credit community. Mr. Hays is a Past President of the Commercial Law League of America (CLLA), having served as Recording Secretary of the League, Chair of the Creditors Rights Section, Chair of the Southern Region, and a representative to the Board of Governors. In addition to being active in the Bankruptcy Section of CLLA, he is an Associate Member of the National Association of Bankruptcy Trustees. Mr. Hays was a founding member of the Creditors Rights Section of the State Bar of Georgia, and has served as Legislative Liaison for that Section.</p><p>He is an editor for the National Association of Credit Managements Handbook of Credit and Commercial Laws, focusing on chapters related to materialmans liens and construction bonds, and is regularly invited to speak on creditors issues, construction law, and bankruptcy for the National Association of Credit Management and many of its constituent credit groups. He is regularly an advocate for creditors rights at the state and federal level.</p><p>Mr. Hays earned his J.D. at the University of North Carolina School of Law, where he was a member of the Holderness Moot Court Bench. He received a B.A. in Political Science at the University of North Carolina at Chapel Hill. He is admitted to practice in Georgia, the U.S. District Court for the Northern, Middle, and Southern Districts of Georgia. He is a member of the State Bar of Georgia and has earned the AV Preeminent peer review rating by Martindale-Hubbell.</p></li><li><p>*JEFF BAST</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSjbast@bastamron.comJeffs practice focuses on bankruptcy and insolvency, emphasizing corporate reorganization, restructuring, creditors rights, workouts, and commercial litigation in several industries, including real estate, retail, healthcare, telecommunications, internet and technology, hotels, textiles, transportation, franchise operations, travel, aviation, manufacturing, and financial institutions.</p><p>He also provides insolvency-related advice and has extensive experience with all aspects of bankruptcy litigation, appeals and legal opinions for complex transactions.</p><p>He now represents corporate debtors, shareholders, trustees, receivers, indenture trustees and creditors committees, as well as financial institutions and other secured and unsecured creditors in complex workouts, reorganizations and liquidations</p></li><li><p>*KIRK BURKLEY</p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSkburkley@bernsteinlaw.comKirk is the supervising partner of the firms Bankruptcy and Restructuring practice group. The Bankruptcy and Restructuring group handles national cases and acts as an efficient, one-stop shop for our clients bankruptcy and restructuring needs. Kirk is experienced in representing secured and unsecured creditors in bankruptcy, financial restructuring and workout situations, including the representation of numerous unsecured creditors committees, equipment lessors, financial institutions and commercial landlords.Kirk has also represented owners, contractors and subcontractors in construction disputes and regularly advises developers and lenders on large real estate transactions. Additionally, Kirk has developed unique experience in many facets of shareholder litigation in different industries.Kirk is certified in Business Bankruptcy and Creditors Rights Law from the American Board of Certification. He frequently appears before the United States District Courts for the Western, Middle and Eastern District of Pennsylvania, as well as the Pennsylvania state courts. He is also admitted to practice in the United States District Court for the Northern and Southern Districts of West Virginia.Kirk has quickly been defined as a well-respected lawyer in his field, as is evidenced by being named a Pennsylvania Rising Star from 2005 to 2012 and a Super Lawyer in 2013 by Philadelphia Magazine. He has lectured for the National Association of Credit Management (NACM), American Bankruptcy Institute and the Pennsylvania Bar Institute. He is a regular panelist for NBI and Lorman Educational Services on various legal topics.In 2013, Bernstein-Burkley, P.C. was ranked by U.S. News Media Group and Best Lawyers as a Metropolitan First Tier Law Firm in the areas of:Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization LawLitigation Bankruptcy</p></li><li><p>*ADAM NACH </p><p>FIGHTING ABOUT INVOLUNTARY BANKRUPTCY PETITIONSadam.nach@lane-nach.comCLLA Member, Adam Nach is the managing partner of Lane &amp; Nach, PC . Mr. Nach was the judicial law clerk to the former Chief Bankruptcy Judge for the District of Arizona, Robert G. Mooreman. He is a frequent lecturer on bankruptcy law and creditors rights and has written extensively on such matters, for the Norton Bankruptcy Institute, the National Association of Bankruptcy Trustees, the Arizona State Bar, and the National Business Institute. Mr. Nach is also admitted to the Arizona State Bar and 9th Circuit Court of Appeals and the United States S...</p></li></ul>