Mediation and Lawyers for Bankruptcy Cases
Courts of law today are used for more than divorce cases or criminal defense. It is fairly common for bankruptcy courts to see action as well, and bankruptcy filings are common today. Many wealth individuals and small businesses make use of chapter 11 bankruptcy law in particular, and commercial disputes over property and assets may occur during bankruptcy cases. However, some professionals on the scene may have great litigation skills but limited mediation or compromise capabilities, and thus stand-by mediation may be used. Such stand-by mediation involves mediators who have no financial or personal stake in the bankruptcy case, bur rather can help ensure that everyone acts in a fair and productive manner. Modern stand-by mediation may be done to ensure good dialogues between all parties in a bankruptcy case, and these stand-by mediation experts may also fresh perspective that can help move a case forward.
One may first consider why companies might file for bankruptcy to begin with. Sometimes, it is bad business practices or ill-advised loans that may lead a company to bankruptcy, or its customer or client base may dry up. In other cases, however, a bankrupt company was the victim of a crime. Many businesses today, big and small, make use of computers and the Internet for sharing and storing information, but cyber criminals sometimes take advantage of this and hack and steal information. Once inside a business’s data server or mainframe, a cyber criminal may steal bank account information, passwords, client information, and more. This can result in massive financial losses that may hurt larger companies and entirely cripple and bankrupt smaller ones. In other cases, employees are embezzling money, or covertly diverting company money into their own pockets. Securities fraud, meanwhile, is when a white-collar criminal distorts or falsifies information on stocks, investments, and more to fool investors into making bad decisions. This can also lead to bankruptcy in some cases. It may soon be time for bankruptcy court and stand-by mediation.
Bankruptcy is a dreaded word, but bankruptcy and debt relief is a very real possibility in court, and many debtors in fact file for bankruptcy without their impatient creditors needing to force the issue. Some may think of bankruptcy as “hopeless an broke,” but stand-by mediation and bankruptcy lawyers in court may ensure that the proceedings will be fair and productive for everyone involved. For their part, stand-by mediation experts will encourage all parties involved to create and offer new, fair, and productive ideas. They may also help smooth relations between parties that are experts at litigation and law but not as skilled with opening a dialogue. With a lot of money and some people’s livelihoods on the line, smooth and productive dialogue is very much to be desired.
What else is happening during bankruptcy court? If the debtor company has acted honestly and lawfully so far, they may be considered DIP, or debtor in possession. The debtor party will retain ownership of its enterprise and stay open for business, but with conditions attached. The debtor may not (without permission) take on new loans, hire lawyers, or buy or sell property outside of what is normally bought and sold for business. Violating these terms, or other illegal or dishonest acts, may cause DIP status to be revoked.
With the aid of bankruptcy lawyers, the debtor will be asked to create and present a reorganization and debt relief plan, and may be given a few months to work on this project. The debtor may also receive a time extension if so requested. Once the plan is complete, the debtor will present it to court, and it may involve downsizing, partially liquidating, or at least restructuring the debtor party to make debt repayment easier and faster. If the plan is accepted, it may be set into motion. In rare cases, it may be rejected and the creditors will devise their own plan. Either way, a plan may partly or totally liquidate the debtor to make total or at least partial debt repayment possible. In some cases, the debtor will be totally liquidated and only part of the debt may be repaid, but if this is the best that can be done, the creditors will have to accept that.