The Bankruptcy Reorganization and Creditors’ Rights Practice Group at Hamilton Stephens Steele & Martin, PLLC is led by Glenn C. Thompson. The bankruptcy group has been a key practice component of the firm since its inception in 2001. The firm is one of few in Charlotte which devote a substantial portion of its bankruptcy group practice to representation of corporate and individual debtors in chapter 11 bankruptcy cases. Because of the firm’s strong emphasis in the real estate and construction areas, the bankruptcy group has extensive experience representing owners, developers, general contractors, and subcontractors in a variety of commercial, multi-family, mixed used and neighborhood developments with particular strength in single asset real estate bankruptcy cases. In addition to real estate focused clients, the bankruptcy group has undertaken to represent a broad variety of clients including closely held companies, sole proprietors, limited liability entities, high wealth individuals and non-profit corporations.
In representing debtors, the bankruptcy practice group draws upon not only its own expertise but is able to utilize the vast experience in the firm’s other practice groups to provide advice and counsel in all matters arising in chapter 11 proceedings including public and private sales of assets, financing, restructuring of debt, determination of validity, priority and extent of secured liens, valuation of assets, analysis and prosecution of bankruptcy causes of action, and formulation and confirmation of chapter 11 plans. Members of the bankruptcy group are admitted to practice in North Carolina, South Carolina, Texas and California. They practice before all federal bankruptcy courts in North and South Carolina and appear in bankruptcy courts throughout the country.
Chapter 11 Debtor Representation
As debtor’s counsel, the firm has represented debtors-in-possession in numerous industries including real estate development and construction, manufacturing, retail, restaurants, energy, automotive dealerships, religious organizations, wholesalers, distributors and internet commerce. A key component of the firm’s service to financially distressed companies is careful assessment of options available and preparation of a roadmap to guide clients to a successful outcome. Consideration of alternatives to bankruptcy is critical to ensure the most effective strategy to meet the client’s goals. Depending upon the issues presented by a particular client, out of court alternatives or even liquidation may sometimes yield the best outcome. Our attorneys work closely with clients to help them understand the process, pitfalls and legal tools available so that they are fully aware of the alternatives, risk and probable outcome.
Out of Court Restructuring
Often, bankruptcy, with its costs and requirements, may not be the only or even the best alternative for a client. The firm’s bankruptcy group is experienced with out of court alternatives including creditor composition agreements, assignment for the benefit of creditors, receivership, ordinary liquidation and state court dissolution. A critical component of these alternatives is often directly engaging creditors of the debtor in meaningful negotiation. Secured creditors such as banks are key, since their rights in collateral and claims against principals under guarantees must be addressed. Often, a plan can be structured in order to minimize costs and maximize protection for the debtor and its principals. In some cases, the best strategy is proven to be education, empowerment and support of the business principal as he or she negotiates directly with the lender and trade creditors.
When an unexpected event threatens to harm a business, rapid assessment and intervention is often necessary. The attorneys of HSSM are skilled in evaluating the nature and extent of the threat and have available to them the tools and ability to manage the situation. When necessary, state and federal courts can bring relief through preliminary or temporary injunctions or receiverships. When necessary, an involuntary or voluntary bankruptcy petition may be filed to stop actions by a creditor which would adversely impact the debtor’s assets and ability to restructure.
State and federal court litigation often arises in the insolvency context. Whether it is defense of avoidance actions including preference and fraudulent conveyance, prosecution of discharge or dischargeability actions, defense of equitable subordination, prosecution and defense of commercial collection actions, or enforcement or defense of guarantees, the insolvency team includes skilled litigators able to deal effectively with these matters.
Creditor and Creditor Committee Representation
The trade creditor often finds itself at the bottom of the distribution chain. The bankruptcy group regularly advises creditors on how to structure their credit applications, guarantees, terms and conditions of purchase or sale, purchase money or regular security interests so as to ensure that, when and if insolvency of a customer does occur, the trade creditor is in the best possible position. Advice and guidance is also given on how to collect from an overdue customer in a way which minimizes exposure to preference disgorgement. When a bankruptcy is filed, the firm represents the trade creditor in filing the proof of claim, request for payment for deliveries within the 20 days prior to bankruptcy under §503(b)(9) and request for payment of administrative expenses for post-petition services to the debtor. The firm also monitors the docket for potential objections to trade creditor claims and other actions which might be directed at individual creditors. When a preference action is threatened or filed, HSSM attorneys defend them aggressively, handling such matters in bankruptcy courts throughout the U.S.
In situations where creditors have formed an official or unofficial committee, the firm can also represent the committee of creditors and be an active participant in the bankruptcy case in negotiations with the debtor’s principals in and out of court. Recognizing that, in bankruptcy, the voice of the creditors’ committee can carry significant weight with the bankruptcy court, our attorneys take an active role in the case to negotiate for a meaningful distribution to unsecured creditors and ensure that the assets of the estate are not wasted.
Reach out to any of the professionals listed above to see if Hamilton Stephens Steele & Martin, PLLC can help you protect your rights in your insolvency matter.