Strategies and Solutions for Debtors and Creditors
Gary Marks has represented clients in federal bankruptcy cases since 1983, including debtors, trustees, creditors’ committees, secured and unsecured creditors, landlords, equipment lessors, and other parties in interest. Well known as a Chapter 11 debtor’s attorney, Gary has advised financially distressed businesses from small “mom and pop” companies to large corporations and everything in between, helping them to understand the complexity and utility of Chapter 11 of the Bankruptcy Code. Businesses with financial problems will consult Gary to find the best path forward. He explores and explains options, makes recommendations, and manages the process to the best achievable outcome. He will identify goals (reorganization, sale, liquidation) and implement strategies while communicating with management on a day-to-day basis as the company operates under the protection of Chapter 11. Skilled at negotiating confirmable plans of reorganization and orderly liquidation with disparate creditor interests, Gary has been recognized in his field as one of the Best Lawyers in New Jersey.
In addition to his debtor practice, Gary also has extensive experience representing Chapter 11 creditors’ committees and operating trustees and has been appointed by the Office of the United States Trustee to serve as a trustee himself.
Contact us for a free consultation.
Of interest to smaller companies confronted with financial problems, “SubChapter V,” the Small Business Reorganization Act, was enacted in February 2020. SubChapter V offers a potential lifeline for small business debtors with secured and unsecured debt not exceeding $7.5 million by relaxing certain requirements found in traditional Chapter 11 cases to make the process less expensive and more efficient ― in short, more “user friendly.” Gary will advise qualified companies on whether SubChapter V is a feasible remedy for them. Contact us for a free consultation.
For individuals and couples suffocating under the weight of credit card debt, unexpected medical bills or if recently unemployed, Chapter 7 of the Bankruptcy Code is often a viable option. Chapter 7 allows qualified debtors to discharge most debts while exempting certain assets from creditor claims, affording them an opportunity for a “fresh start.” Gary will counsel you as to the advantages and disadvantages of a Chapter 7 bankruptcy and, if qualified, will shepherd you through the process. Once that petition is filed, your anxiety will dissipate, and you will feel a weight lifted off your shoulders. Contact us for a free consultation.
Assignments for the Benefit of Creditors
New Jersey has its own statute for the liquidation of insolvent businesses that is often a useful alternative to a Chapter 7 bankruptcy proceeding. In an assignment for the benefit of creditors, or “ABC,” the debtor (“assignor”) makes a voluntary transfer of all its assets to an “assignee” in trust for the assignor’s creditors. The assignee then marshals the assignor’s assets, liquidates the assets and distributes the proceeds pro rata to creditors. Like a bankruptcy trustee, the assignee is also vested with avoidance powers, allowing him to “claw back” preference payments made to creditors and fraudulent transfers of assets to insiders and other third parties. Funds recovered under the assignee’s avoidance powers increase the distribution to creditors.
ABCs are usually less expensive and move more quickly than a bankruptcy proceeding. Also, unlike a bankruptcy where a trustee is randomly appointed to a case, in an ABC, the assignor, counseled by his professionals, will select a qualified assignee, often someone familiar with the assignor’s business.
Not only has Gary represented assignors and assignees in ABCs; he also has been selected and served as an assignee himself in significant cases.
If you are the owner of a business experiencing financial problems, Gary Marks can assist you in making an informed decision as to whether an ABC is a viable alternative for your company, and, if appropriate, guide the company through
the process. Contact us for a free consultation.
Creditor Compositions or Workouts
A creditor composition, also known as an out-of-court work-out, may be a cost effective and time-saving alternative to a formal insolvency proceeding. In a composition, a financially distressed business negotiates a global settlement of claims with each of its various creditor classes ― secured creditors, taxing authorities, landlords, trade creditors, etc. ― as part of a financial restructuring of the business or an orderly liquidation. The goal is to maximize creditor return with minimal economic disruption to the debtor’s business. This is done without the necessity of a court proceeding. Although the speed, cost and minimal disruption to the business are clearly advantages of this strategy, it can be a challenging process, particularly if there are aggressive creditors seeking their own advantage at the expense of all other creditors.
Skilled counsel is essential to navigate the company through the narrows that are an out-of-court work-out. Gary Marks has successfully negotiated numerous creditor compositions and can advise you if your company is a candidate for this innovative remedy. Contact us for a free consultation.