Covid-19 & Chapter 128 & Bankruptcy Filings

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These are tough times. The future remains uncertain for individuals, families, and businesses in Wisconsin and across the nation. We will get  through this and we can help.

Extended unemployment benefits, small business loan programs, and stimulus checks only go so far, leaving many wondering how they will manage to make ends meet and keep a roof over their heads as they continue to socially distance. Low consumer confidence threatens to reduce the impact of opening up the economy, all as a combination of financial and safety concerns make a long recession appear certain.

With so much bad economic news and no end in sight, what can a business do if debts and lack of cash flow threaten their solvency? In Wisconsin, businesses can consider both bankruptcy options, including Chatper 11 and the new Chapter 5, and Chapter 128 receiverships.  Chapter 128 receiverships are a non-bankruptcy option for obtaining debt relief via the appointment of a receiver, the sale of company assets and the discharge of debts.

A business going through either a Chapter 11 bankruptcy or a Chapter 128 receivership can continue to operate and provide services to their customers while working to sell their assets as a going concern and simultaneously resolving associated debt obligations, liens, and other entanglements.   In a Chapter 128, a receiver is appointed to manage the process, while in a Chapter 11 bankruptcy, most often the company’s management stays in control.  Chapter 128 always results in a sale, whereas Chapter 11 can result in either a sale or a reorganization plan.

Attorney Rebecca DeMarb represents businesses struggling financially in Wisconsin and the surrounding area.  In addition, she serves as a receiver throughout Wisconsin. This includes her recent appointment as a receiver over the assets of Quality Assembly & Logistics, LLC. Her appointment was crucial to the ability of the Marinette, Wisconsin business to continue providing essential services during the COVID-19 crisis.  She has served as the Receiver and the Company’s counsel in numerous matters, both inside of and outside of court, where she has successfully helped businesses emerge from under insurmountable debt, helped creditors minimize losses and enabled business to find new ownership, new capital, preserve legacy and get a fresh start, thereby saving jobs and even communities.

Chapter 128 or Chapter 11 may be the answer you are looking for as you navigate this tough economic climate. You can count on our firm to provide you with the advice you need to make an informed decision about the way forward.

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