Small-Business Work-Outs

Getting Out of the Red into the Black

What Does a Small Business Work-Out Do?

    A small business work out is a formal plan presented to creditors in which you as the small business owner offer your creditors benefits that they could not get through a law suit or involuntary bankruptcy filing. .

Does Every Struggling Business Need to Consider a Work-Out?

     No. For example, small estates and estates that distribute all or almost all of

their property through the use of beneficiary designations and joint tenancies may

avoid probate even if the estate is worth millions. Not being subject to probate is not

the same as not being subject to estate tax.

    However, before you decide that you fit into an exempt or non-exempt group

you should consult an experienced attorney.

When is an Out of Court Plan of reorganization the right choice?

    The Business is on a sustained up-tic - You can prove this by some reliable demonstrative evidence, such as newly contracted business, income from customers who are under contract etc.

    Your new business plan makes sense and is supported by credible information - This is critical. If you cannot convince yourself that your business is going to make it you will never convince anyone else. If you are convinced that you are going to come out of this storm stronger than you ever were

    You are working with a limited number of creditors - If your company owes one hundred dollars to thousands of customers, you will probably need to use the Bankruptcy Court, because bankruptcy proceedings are structured for efficiency and dealing with creditors as a class, however, if you have a manageable number of creditors [subjective], you will ultimately need to decide where to go, but don't make that decision without expert help.

    You are Not dealing with large amounts of unliquidated debt - If you are more or less in agreement your creditors as to how much you owe than you may be a good candidate for a workout, but if you dispute the claimed amounts than you would probably be better off in a chapter 11, 12, or 13 bankruptcy case.

When is an Out of Court Plan of Reorganization a High Risk Choice?-

If the person who will take the point isn't a negotiator, this would be very risky.

The point person has to absorb information and be able to recall facts with great

alacrity. Nor can you use a wilting violet who will agree to anything to

avoid confrontation. If your workout team is led by a person with a good grasp

of the facts, a good idea of what the creditor is willing to accept, who is able to

paint a positive but accurate picture, you may benefit from a workout. However,

if the person exaggerates, uses numbers pulled out of the air, or worse is unprepared for the job Bankruptcy with its structure and rules may be a better choice.

Feel free to call us and to discuss your options. Once we have been retained we will do a thorough analysis of your business, business plan, projections. If you need to file a petition in Bankruptcy we will make sure that you do it at the right time and in the right chapter.

Bankruptcy Filing Fees - They are not cheap. But they should be considered

To find Out what the fees are, Click Here.

The information on this page is not intended to be legal advice, for estate Planning, Tax planning or probate law. Its sole purpose is to raise questions to consider. Using this information as legal advice is dangerous, not recommended and is done at your own risk. This information does not create an attorney client relationship between the publisher and anyone who reads the information.

INTEGRATED ESTATE PLANNING | This is a multidisciplinary approach to Planning for sophisticated estates. Tax planning, probate avoidance, business succession planning, and asset protection are combined with estate planning to create a comprehensive goal focused plan. We use a team approach, utilizing your current professionals, in this type of work

ESTATE PLANNING | Your successor Trustee wants to complete the process as quickly as possible, while minimizing family disharmony.

PROBATE | The very word probate causes folks to despair they envision scenes from Dickens' Bleak House and court personnel who are as welcoming a crows. This is not true in Orange County California where probate can provide the formal administration framework to get families through difficult times. Additionally with the new technologies available to personal representatives and attorneys the process can be reasonably quick, value priced and not at all like Bleak House.

TRUST ADMINISTRATION | We utilize a proven method which guides the Trustee through the settlement process in a smooth and informed manner. From the very beginning until the finish

RETIREMENT PLANNING | Maximize the benefits you have earned while preserving transferability, stretch, principal.

HEALTH CARE DOCUMENTS | You need a power of attorney for health care, a HIPAA declaration, and a living will. Without them your preferences during incapacity will not be followed.

ASSET PROTECTION TRUSTS | Keep your assets out of the hands of creditors, predators, and the public treasury, ethically and legally.

ESTATE & GIFT TAX PLANNING| Effective tax planning will not only lower income taxes while you’re alive by implementing optimal tax deferral and other strategies, but it will also free up cash for investment, business, or personal purposes.

QUALIFIED PERSONAL RESIDENCE TRUST   | If you are in a position where your estate will being the estate tax this irrevocable grantor-gift trust can save you thousand of dollars in taxes while still allowing you to control the gifted residence.

POWERS OF ATTORNEY | Perhaps the most flexible tool in an estate plan most people including many attorneys do not understand what can be accomplished using this device.

BUSINESS PLANNING | From years of planning experience, we have developed a systematic process that is both practical and client-friendly.

CHARITABLE GIFT PLANNING | Most people work to better not only their family's situation but the community they live in and the world in which their community is a citizen. We will help you transfer values as well as assets. | Perhaps the most flexible tool in an estate plan most people including many attorneys do not understand what can be accomplished using this device.

FORIEGN PRIVATE FOUNDATIONS | This may be the missing piece in your estate planing. Useful in large estates and for sophisticated investors.

WARNING TO ALL READERS

The information on this page is not intended to be legal advice, for estate Planning, Tax planning or probate law. Its sole purpose is to raise questions to consider. Using this information as legal advice is dangerous, not recommended and is done at your own risk. This information does not create an attorney client relationship between the publisher and anyone who reads the information.