Wilk Auslander Attorneys Publish Article in NY Law Journal About the Benefits of Involuntary Bankruptcy

Eric J. Snyder

June 22, 2016

Creditors generally perceive bankruptcy as a bad event. However, in certain circumstances, going through bankruptcy court can allow creditors to secure better results than they would have otherwise. Using a somewhat novel strategy, a creditor can force the debtor into an involuntary bankruptcy. This can be advantageous because the Bankruptcy Code provides certain remedies for creditors that are not available under state law, including more powerful tools to maximize the amount of their claims.

Wilk Auslander's Restructuring Team has used this strategy very effectively in the past to expeditiously secure much larger recoveries for creditor clients than they otherwise would have received if they sought to enforce their claims in state court or federal district court.  For example, in the largest vehicle franchisor bankruptcy in US History (Saab Cars North America), the firm represented the US Saab dealers and forced Saab's North American subsidiary into bankruptcy. (this case was featured in an earlier newsletter and you can read about it here.)
Eric Snyder and Eloy Peral recently published a piece in The New York Law Journal  about the use of involuntary bankruptcy, including:  background and statutory framework; the types of situations where this strategy may make sense; and how the process works.

You can read the full article here.