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Will former investors find out if I file BK?

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  • Will former investors find out if I file BK?

    I'm really fearful that if I file BK, that former investors will find out. You're supposed to list all your business partners/investors for the last six years in the Statement of Financial Affairs. I am scared that even though we dissolved the company last year that these former investors will find out. Will they get contacted by the trustee or creditors?

    Thanks

  • #2
    If they had a stake in your business when you went bankrupt, they will be notified as any creditor. Also the information will be public information and easily searchable and if your area newspapers publish BKs on a regular basis (major newspapers in our area post them every Sunday - all chapters including Chapter 11's), it will be out there for all to see who may review that information published.

    Have you discussed this with your attorney?
    _________________________________________
    Filed 5 Year Chapter 13: April 2002
    Early Buy-Out: April 2006
    Discharge: August 2006

    "A credit card is a snake in your pocket"

    Comment


    • #3
      Thank you Flamingo for your reply.

      We closed the business last year. The company was a c-corp and did not file for bankruptcy. We paid off our creditors and it was dissolved. I had to assume the company credit card debt because I had to personally guarantee the cards. These would be included, if I filed. I have not yet filed in part because I want to understand all the potential repercussions. I have been told that only creditors to whom you owe monies get contacted. The former investors are not considered creditors. The company was a separate entity. I have mentioned this to my attorney and she tells me I am over-thinking it. I am going to probe more on this topic the next time I speak with her. I like coming on this site before I speak with my attorney because I can go into the sessions better prepared.
      Last edited by onthebrink; 02-26-2010, 11:08 AM.

      Comment


      • #4
        Will former business investors find out about my filing personal bankruptcy?

        I'm really fearful that if I file personal BK, that former investors will find out. You're supposed to list all your business partners/investors for the last six years in the Statement of Financial Affairs. I am scared that even though we dissolved the company last year that these former investors will find out.

        The company was a c-corp incorporated in Delaware. The company ran out of money and was dissolved last year. I along with the remaining 3 employees were dismissed in August. The company was dissolved by the investors in December. I have been on unemployment since September and am considering filing BK, ideally Ch 7. I have hired an attorney.

        Will they get contacted by the trustee or creditors?

        To add further complication, I am trying to restart the company and need to work with the former investor in order to retain rights to the intellectual property associated with the company. I also just found out that the company is listed as "active" in CA even though it was dissolved in Delaware.

        I had one attorney tell me to not list the company since it was dissolved and had no assets.

        Would appreciate advice. My attorney has told me I am over thinking it and not to worry. We have "discussed" via email but not yet had a chance to speak about it in person. I am concerned that she may lack experience with my type of case. She said she deals with small business BK's all the time. I am trying to get informed as possible and have found this a great source of information. I have been posting in the General BK section but another member suggested I check out the Small Business section.

        Thank you

        Comment


        • #5
          Well, if your investors are also your creditors, you have to list everyone you owe in your Creditor Matrix. So, yes, they will be notified by mail of your 'Suggestion of Bankruptcy'--that is what that document is called.

          Now, if the investors are NOT among your creditors, then, no they won't necessarily be notified--that I am aware of. However, BK filings are Public Record, and if anyone wishes to, they can go to the courthouse and ask to look at your paperwork. Also, depending on your local newspaper's policy, the news of your filing might be published in the financial or legal section.

          Good luck!
          "To go bravely forward is to invite a miracle."

          "Worry is the darkroom where negatives are formed."

          Comment


          • #6
            If you have rights in the intellectual property of that company, then that is an asset that you may need to include in your list of assets. You do need to list that you held an ownership interest in the company but that it was shutdown and dissolved in December. If it was shutdown, and if you don't owe them any money or they don't owe you any money then they're not creditors and they aren't assets either so there's no reason they would be contacted unless the trustee thinks you shut the company down to hide an asset.

            --William
            I am an attorney, but I am just not your attorney.
            As such, any statement is not intended to create an attorney/client relationship.

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            • #7
              To the OP - on 2/26 you posted the exact same thread in another forum - that thread was merged into your new posting in this forum. Please refrain from making duplicate postings in multiple forums. Thank you.
              _________________________________________
              Filed 5 Year Chapter 13: April 2002
              Early Buy-Out: April 2006
              Discharge: August 2006

              "A credit card is a snake in your pocket"

              Comment


              • #8
                Thank you, BK. You always provide very useful and insightful answers/information.

                Comment


                • #9
                  You will have to list your Corp on Form B7 # 18. It asks for beginning and ending dates of operation that debtor had a 5% interest or more. You would list the date the corp was dissolved.

                  As to investors, they were investors of the Corp, not you personally... if this is correct. If so, those investors would NOT need to be listed or notified of your Bk.

                  I agree with your Atty; you are over-thinking this situation. Relax.

                  Comment

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