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Bankruptcy Litigation in Nevada, in contrast with litigation in other contexts, moves at lightning-fast speed, requiring substantial pre-planning and implementation of safeguard/exit strategies before and immediately after the case filing.
Our bankruptcy team combines Nevada industry experience, litigation, and creative problem-solving skills to efficiently and effectively further our clients’ objectives. Our bankruptcy team has extensive knowledge of how debtor-creditor issues affect day-to-day business operations and long-term viability is one of the hallmarks of the Black & Wadhams advantage.
At Black & Wadhams, our Restructuring and Insolvency attorneys advance and protect our clients’ rights through the complex world of bankruptcy litigation, liquidation, or restructuring. We understand the process from both sides and are equally equipped to enforce creditor’s claims or protect a debtor’s assets.
Corporations and other business entities file under Chapters 7 or 11.
Bankruptcy Chapters
There are six types of bankruptcy under the Bankruptcy Code:
- Chapter 7: Basic liquidation for individuals and businesses;
- Chapter 9: Municipal bankruptcy;
- Chapter 11: Rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets;
- Subchapter 5
- Chapter 12: Rehabilitation for family farmers and fishermen;
- Chapter 13: Rehabilitation with a payment plan for individuals with a regular source of income;
- Chapter 15: Ancillary and other international cases.
The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13.
Bankruptcy courts often immediately address and issue orders concerning major issues (e.g. use of cash collateral, debtor-in-possession financing, employee retention and compensation, assumption and rejection of unexpired leases and contracts, and payment of priority creditors or critical vendors) that significantly impact claims, viable assets and the potential for reorganization.
We know and understand the intricacies of the Bankruptcy Code and the nuances of local practice. We have the skills and experience to quickly comprehend and analyze new businesses and industries. Our goal is not to litigate for the sake of litigation but employ the litigation process aggressively and efficiently when necessary to meet our clients’ goals.
Major disputes can be litigated on day one or within weeks of the bankruptcy filing, often involving complex transactions for which the parties have limited due diligence and discovery time
Bankruptcy FAQs
1What is a chapter 7 bankruptcy?
Both corporations and individuals are permitted to file Chapter 7 bankruptcy. Individual debtors are permitted to retain certain "exempt" property, while the remaining non-exempt assets are liquidated by a chapter 7 trustee. An individual debtor is entitled to seek a discharge of certain types of debt. A corporate entity does not receive a discharge. The trustee will distribute the funds from the liquidation to holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
2What is a chapter 13 bankruptcy?
In a Chapter 13 bankruptcy, individuals with regular income repay a portion or all of their debt over an extended period of time (3-5 years). Chapter 13 may be appropriate for debtors who seek to retain certain assets through a repayment plan. An individual is eligible for a Chapter 13 bankruptcy as long as the individual has unsecured debts of less than $383,175 and secured debts of less than $1,149.525. See 11 U.S.C. § 109(e) (these amounts are subject to periodic change).
3What is a Chapter 11 bankruptcy?
While there may be times that talking to the press about your lawsuit is useful, those times are very, very rare. We strongly recommend you consider “no comment” until you and your lawyer have decided the benefits of saying something outweigh the risks. Remember, you will not “win” your case through the press. But you might lose it.
4What happens when a bankruptcy is filed?
Generally, upon the filing of a bankruptcy petition, the “automatic stay” takes effect. An “automatic stay” prohibits creditors from commencing or continuing collection efforts against the debtor or its/his/her property. Certain actions listed in Section 362(b) of the Bankruptcy Code are not subject to the automatic stay (for example, criminal actions against the debtor or actions by governmental agencies to enforce police or regulatory powers). Creditors can seek relief from the “automatic stay” by filing a motion in the bankruptcy case.
5What is a “341 meeting”?
The meeting of creditors is a hearing all debtors must attend in any bankruptcy proceeding. The 341 meeting is held outside of the presence of the judge and usually occurs between 20 and 40 days after the filing of the petition. It is also referred to as a "341 meeting" because it is mandated by Section 341 of the Bankruptcy Code.
In Chapter 7 and 13 cases, the trustee assigned to the case conducts the meeting. In a Chapter 11 case, a representative of the United States Trustee's Office conducts the meeting. At the meeting, the trustee or the representative of the U.S. Trustee reviews the debtor's petition and schedules with the debtor. The debtor is required to answer questions under penalty of perjury about the debtor's conduct, property, liabilities, financial condition, and any other matter that may affect the administration of the case or the debtor's right to discharge.
The meeting is also referred to as a "meeting of creditors" because creditors are notified that they may attend and ask the debtor questions pertaining to assets or any other matter pertinent to the administration of the case.
6What is a discharge?
A discharge prohibits creditors from taking action against the debtor on debts incurred prior to the bankruptcy petition date. Unless otherwise ordered by the Bankruptcy Court, a discharge does not prevent enforcement of a lien or encumbrance on property of the debtor.
A creditor or trustee may seek the denial of a debtor’s discharge based on certain actions listed in the Bankruptcy Code. 11 U.S.C. § 727. If the debtor’s discharge is denied, none of the debtor’s debts are discharged and all creditors can proceed to collect their debts against the debtor.
7What is a non-dischargeable debt?
A creditor may also seek to have its specific debt found “non-dischargeable” based on certain prohibited actions listed in the Bankruptcy Code. 11 U.S.C. § 523. In a Chapter 7, examples of such actions include, fraudulent conduct, embezzlement, willful or malicious injury to another party. If a debt is found by the Bankruptcy Court to be non-dischargeable, the creditor that holds the debt is not prohibited from collecting the debt after the debtor received a discharge.
8What is a Plan of Reorganization?
The Plan of Reorganization is a document that is filed with the Bankruptcy Court in Chapter 11 or 13 cases that sets out how a debtor intends to repay creditors. The plan divides creditors into classes. The plan sets forth the treatment of claims for each class of creditor and provides a means for the plan's implementation (i.e. how the creditors will be paid).
