When Trustee Steven Speier has a case in which there is a corporate debtor, Trustee Speier asks questions that he would not necessarily ask in a personal bankruptcy.
A business has a different purpose and rights and responsibiliites under the bankruptcy code. The Trustee must access the business situation and must make a different analysis than he would if a natural person files bankruptcy.
Some of the different questions he asks are:
He asks about inventory the corporation may have had at the time of filing. He asks about bank accounts and accounts receivable. He also asks about business equipment the corporation may have such as trucks, forklifts and other machinery.
Unlike a personal bankruptcy, a corporate bankruptcy does not have exemptions. So everything that the corporation owns is not protected and is subject to a Chapter 7 trustee taking the property and selling it for the benefit of the estate.
Trustee Speier and other Chapter 7 Trustees ask about the business and the nature of the service or product that was provided. He might ask
How long the business was in existence? What was the business’ gross sales at its highest point? Who are the shareholders? These questions give the trustee a feel for the business and the assets of lack of assets the bankruptcy estate may be entitled to.
Mr. Speier then will usually continue the case to another day and will ask for the following.
He asks for Quick Books for 2010-2013
2010-2012 bankruptcy statements,
Corporate taxes for 2010-2012,
Copies of everything in the corporate records book.
When you have a corporate bankruptcy filing for Chapter 7, anticipate that the Chapter 7 Trustee will ask you and your client for the above information at the least. The Trustee will probably ask for more information depending on the business, but at least you will be ready.