Inflation, the Coronavirus and other factors have contributed to Chapter 11 bankruptcies being filed by giant companies. While fewer options of stores has some impact on consumers, what can you do if you have a smaller business that is owed money by the Chapter 11 business. There are actually a number of steps that you can take to help maximize your recovery. For example, if your business shipped goods that were received within 20 days of the bankruptcy being filed, there are steps that can be taken to change your claim to an Adminsistrative claim which would get paid before all general unsecured claims. The bankruptcy code requires notice and a hearing although in some mega cases that hearing can be waived. In certain circumstances goods received shortly before the bankruptcy is filed can be reclaimed.
Even if your claim does not receive any priority, it generally is still beneficial to file a Proof of Claim to ensure that you will participate in any distributions. Monitoring the progress and participating on the creditors committee are additional ways to protect your claim. Also, consulting with experienced attorneys familiar with representing creditors in Chapter 11 cases such as our firm, McDowell Law, PC in Maple Shade NJ with offices in Sicklerville NJ and Northeast Philadelphia PA would help protect your claim.
