Quote:
Originally Posted by PJackpot
Creditors get left out in the cold in a chapter 7 filing, but not chapter 11, as TooJays has filed. However, the other side of that coin is that only 25% of companies that file chapter 11 survive. A lot of them simply convert to chapter 7 and liquidate all assets if the debt load becomes more than their revenue can support. In that situation, certain creditors would receive a portion of the liquidated asset value. This is what happens when the government forces businesses to close and shuts down a 20 trillion dollar economy. Those of you who were in favor, said you were willing to pay the price, and so you shall. And so shall your children and your grandchildren. This is just the tip of the iceberg.
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Smaller creditors have no say in the proceedings and in most cases are not secured. You cannot blame this on the government, if you are running a seasoned business and cannot support it for two months with no income you shouldn't be in business, especially with the government help for payroll, etc.. Those that file Chaper 11 or 7 will use the shutdowns as an excuse to burn unsecured or weak creditors. I have been through this many times as a creditor and there is nothing I could do about it. I eventually changed my terms to COD and because of it lost customers that I eventually replaced but no longer had to worry about bad debts. These people will continue to pay their secured creditors and themselves but will not send a dime to those that are unsecured. The system is unfair to say the least.