10 Sep American Shingle Bankruptcy Part Two
American Shingle roofing company recently filed for Chapter 7 bankruptcy leaving many consumers without their deposits and without a new roof. I wrote about the filing earlier in an article American Shingle Files Chapter 7 Bankruptcybut I wanted to give consumers a little more information about bankruptcy procedures since most have never been creditors in a bankruptcy case before.
A bankruptcy case is started with the filing of a document called a petition. The actual petition is only a couple of pages long, and contains basic information about the debtor and some estimated statistics. Tofile a case, only the petition and a mailing matrix (mailing list of creditors and parties) needs to be filed. The statistics shown on the petition regardingdebts and assets are only an estimate and may change as the caes progresses.
American Shingle filed it’s case deficient, which means it was filed with the minimum paperwork required. That isn’t unusual and no one should read anything into the fact that they did this, however the documents filed right now don’t tell us much. Wehave to wait to see the rest schedules and statement to get a better picture.
To see the petition filed, click here: American Shingle Chapter 7 filing documents
The remaining documents are due on September 16, 2010. The debtor has 14 days to complete the documents required by law, although an extention of time to file them may be granted by the bankruptcy court. What those documents will contain are: Full listing and valuations for all assets that the company owns; Complete listing of creditors/debts separated into types of creditors and the amounts owedto each; Statement of Financial Affairs answering various financial questions about income, transfers, and other matters.
I am sure that the company has assets but the realquestion is who is entitled to be paid from the sale of assets. Some (or all) of the assets may have been pledged to creditors as collateral. Those creditors are called secured creditors.
If there is property that is not properly pledged, then the Chapter 7 trustee in the case will be in charge of taking control over any assets that might be brought into the bankruptcy estate for liquidation and distribution to creditors.
The trustee will look into the assets that the company had at the time of filing, but the trustee may also look to recover other assets or money from other sources. Chapter 7 trusteesare sometimes able to sue to recover money or assets that were paid preferenciallyor transfered in the months/years before the case was filed. Depending on what the company did, the trustee may be able to add funds to the estatethat could lead to a distribution to creditors.
He will pay the claims in order of their priority under the law. As I said in my previous article, consumer deposit creditors may be entitled to a $2,600.00claim ahead of other general unsecured creditors, if there are any funds to distribute. The deposit creditors come after creditors such as secured creditors, administrative claims (such as the trustee or any other court approved sources who provide work in the bankruptcy case), wage claims,and employee benefit claims. Unfortunately in many cases such as this, there may not be anything left after the higher priority claims are paid but that is not an answered question right now.
When are you Safe after a Fraudulent Conveyance?
Employees of American Shingle may want to read other articles on the Bankruptcy Law Network such as:
My Employer is in Bankruptcy, Can I Still Sue Them?
My Employer Filed Bankruptcy! What Do I Do?
My employer is in bankruptcy â€“ what happens to my health insurance?
My employer is in bankruptcy â€“ what happens to my pension?
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