David Reier, attorney at Posternak Blankstein & Lund, on Companies Going through a Bankruptcy

We ask the question. Where do you live. And what you -- in in property taxes you know. New Hampshire I I was love New Hampshire. But you know is no income tax -- sales tax but man do they get one -- -- -- -- it -- yeah and I -- property I gotta tell it is city you know yesterday it in the news town -- is office reporting minor error in recently issued preliminary property tax bills but Larry. So. Yes there's a phone number you can call the ancestors office who attend and it's -- -- -- all over the place. Nazis. Should check you may be your being overcharged on your property tax exactly I think I. And I'm gonna complain I mean line. Yeah you know we're really feel like you answered when you don't have kids in the school. Right -- campaign all these property taxes and dynamic kid in the schools yeah. That's a good deal when you have kids in school it's not bad when you huddle when you get kids go to private school yeah evident at town. All right adjacent or -- say it's out in your -- for Falwell that you're you're just do. -- AT and it deserved to get on October you got so darn much money he can afford to pay below. A report. -- -- -- And it sound like Wellesley that you pay and all those properties actors and then you're sending -- to Dole's well in that case you're either stupid or Eagles a lot of our right -- We've got a text are coming insane when Chester pays the highest in the past I want and do some. While some gambling it out and find out and we are -- a great guest for. His name's David Pryor he's an attorney -- -- blank Steen and blunt talk about bankruptcy in the week the very sad story surrounding Curt Schilling. David welcome to show -- you don't very good humor with. You know like I've been following like everybody else is Curt Schilling story if it's a sad when and how does this end up getting resolved eventually he didn't even go to the hearing last week. Like that's correct deeply. We probably hearing last week at that the statutory. Meeting of creditors that occurred after every. I think bankruptcy cases filed. And I actually don't like them for not going firing of attorney -- probably -- and not to go myself he didn't really have a lot. Two. And it can be information technology beat providing their viral this senior management and by doing their religious subject himself to a lot of questions said he probably. Doesn't feel like answering other people can answer for him. Let's say your -- of a vendor of a company that goes bankrupt it's 38 studios or could be any number of companies. Or restaurant you're owed money let's EU legitimately legitimately. Delivered the service to that company going through bankruptcy. What -- your chances of getting any money. It really it all depends. The kind of bankruptcy it is -- business -- news. In this particular case we have. A start -- company that was attempting to develop. Video games. And with the kind of bankruptcy you filed the chapter seven which is -- liquidation. So the only way to creditors can't dictate would be from the proceeds of the liquidation and that's been up all depend upon. The value of the assets I think in the case -- 38 studios we know that. Idea that are not going to be worse than any anything close to the debt this case. The first. Creditors Beckett take from the sale of the assets of the secured creditors about the state of -- -- -- in the case. And entirely likely that they're going to get take full I think we can all send out. There's another another pot of money besides the proceeds from the sale of assets. That. Would be available to take. Other creditors the the so called unsecured. Creditors. And that would be money that the bankruptcy trustee. Can recover. From different causes of action that he can pursue on behalf of the 38 studios bankruptcy estate. And they would include things like that going after people who didn't see anything wrong and try to get. To try to recover money or it could be if there were some creditors that got paid in preference to other creditors. Explain why because I've seen this yet -- let's talk about this permanently because I've seen this occur before in previous bankruptcies. Where you know somebody's going into bankruptcy in they get paid there 100000 dollars in fall. And then afterwards if that there's a claw back provision in and you want people to understand how to -- about work statement. Wherever we all the way to work -- misty the the idea is that. Into bankruptcy and in particular and in -- liquidation. Creditors are supposed to be treated. Equally and put on a level playing field so everybody gets. A similar program this year the same as everybody else gets. And it's incredible is right before the bankruptcy filing I get paid more than their fair share. Then the bankrupt the contains provisions that they have student give that money back. To the bankruptcy -- so that it can be available to be. Distributed fairly to all creditors and there's not a lot of technical rules about. How far back in time the bankruptcy trustee could go to get that money back it's usually of ninety days can sometimes be as much as a year. And almost creditors have to pay their money back -- it goes into the pot and the -- we distributed equally to all creditors. It would advice would you give say say there you've got a company and in your struggling financially. Look at how would you advise a client. To avoid pro bankruptcy in the event that you know they're struggling in -- in you're trying to help now. They were backed bankruptcy is truly the last resort this -- -- all else fails. So when a company is struggling financially you really have to do analyze. The car to the financial. Difficulties. It would cause is that it's operating. Poorly then you want to. Figure out there's a way to change the method of operations it's a problem is that it is simply running out of cash. As what the case in 38 studios you then. And there's no way to raise the cash. Then the company has no choice but to shut down and it doesn't necessarily have to file bankruptcy there's a lot of different ways that a company. Can. -- liquidate our bankruptcy is one of them and you -- -- the client on the pros and cons of filing bankruptcy there are advantages and disadvantages there are different ways to liquidate the company. You really have to look at -- case by case basis. Larry well David thank you very much for your time we sure appreciate it very well that's David stop off -- -- excuse me David Dreier. Attorney passionate Weinstein and -- joining us today on the financial exchange.