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Drive for a Ride-Sharing Company, Risk Uber Bankruptcy?

In May, Bloomberg reported that the ride-sharing company Uber admitted that it had been underpaying its New York City drivers because it had taken its share of fares before deducting fees rather than after. The company agreed to repay each of its drivers $900. Interestingly, Uber contracts with 50,000 drivers in the city, so it’s . . . → Read More: Drive for a Ride-Sharing Company, Risk Uber Bankruptcy?

Two Reasons to Incorporate Before a Business Bankruptcy

Debtors operating sole proprietorships can encounter disadvantages in a chapter 7 New York business bankruptcy as compared to more common no-asset, low-income, non-business debtors in the same chapter. They both face chapter 7’s income thresholds, yet non-business debtors need not worry whether a trustee will put a stop to their incomes or sell the assets . . . → Read More: Two Reasons to Incorporate Before a Business Bankruptcy

8 Accounting Pointers Businesses Should Use to Stay Out of Bankruptcy

I recently explained why a debtor might want to file a chapter 7 New York business bankruptcy, but I thought it might help business owners to recognize some accounting pointers businesses can use to stay out of bankruptcy court. Here are eight.

(1) Start your small business small. Many people starting out their businesses think . . . → Read More: 8 Accounting Pointers Businesses Should Use to Stay Out of Bankruptcy

Why File a Chapter 7 New York Business Bankruptcy?

I’ve discussed before which chapter is best for a New York business bankruptcy. For a business that’s a separate legal entity from its owners, only chapter 7 and chapter 11 are available. Debtors who freelance or work as unincorporated general partners can use chapter 13 as well. Although chapter 11 makes the news when big . . . → Read More: Why File a Chapter 7 New York Business Bankruptcy?

U.S. Supreme Court Sides With Worker-Creditors in Jevic

Usually workers in bankruptcy cases are debtors, but when employers are in bankruptcy, then their employees can find themselves wearing creditors’ shoes. Frequently, the employers owe money to banks as well, which leads to conflicts between the workers and the banks over the company’s assets and revenue. Typically, the Bankruptcy Code’s system for prioritizing creditors’ . . . → Read More: U.S. Supreme Court Sides With Worker-Creditors in Jevic

What is ‘Equitable Subordination’?

I recently discussed priority claims in New York bankruptcy in the context of the U.S. Supreme Court’s upcoming ruling on the future of “structured dismissals” in chapter 11. The case raises the issue of whether creditors can enter into an agreement, approved by the bankruptcy court, that repays some debtors ahead of others outside the . . . → Read More: What is ‘Equitable Subordination’?

Piercing the Corporate Veil in a New York Bankruptcy

The phrase, “piercing the corporate veil,” is not a bankruptcy concept and does not appear in the Bankruptcy Code. Rather, it is a state-law equitable remedy for collapsing corporate entities with their principal shareholders to enable plaintiffs in civil actions to recover money from them—usually in fraud cases. Typically, the creditors sue the business entities . . . → Read More: Piercing the Corporate Veil in a New York Bankruptcy

Business Leases: Tricky in Bankruptcy

The Bankruptcy Code doesn’t have a specific chapter addressing business bankruptcies. Debtors who own businesses must instead choose among options that are dispersed throughout the Bankruptcy Code based on their businesses’ and personal circumstances. One such circumstance that can influence the chapter debtor-owners choose is the fate of a lease for business property. For many . . . → Read More: Business Leases: Tricky in Bankruptcy

What Is ‘Abandonment of Property’ in Bankruptcy?

When we think of abandonment, images of derelict buildings spring to mind. In New York bankruptcy, though, it’s just the process by which a trustee (or debtor in possession) can divest property from the bankruptcy estate, returning it to the debtor. Section 554(a) of the Bankruptcy Code authorizes the trustee to abandon any asset that . . . → Read More: What Is ‘Abandonment of Property’ in Bankruptcy?

When Is It Worthwhile to Initiate an Involuntary Bankruptcy Against a Debtor?

The facts behind the recent Supreme Court case on whether a bankruptcy debtor engaged in actual fraud without a misrepresentation raises a question worth exploring: When is it worthwhile for creditors to initiate an involuntary bankruptcy against debtors as opposed to merely suing for breach of contract in state court? (It wasn’t an issue in . . . → Read More: When Is It Worthwhile to Initiate an Involuntary Bankruptcy Against a Debtor?