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grantlawpc, Attorney
Category: Bankruptcy Law
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Experience:  United States Bankruptcy Code: Chapter 11 Business Attorney; Restructuring and Recoveries
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In case of bankruptcy/liquidation of the business/project wherein

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In case of bankruptcy/liquidation of the business/project wherein I have participated through investment for a Green Card, what type of liquidation process will be followed and what would be my status in the list of creditors to whom the liquidated assets/value would be distributed ? Will it be in a court jurisdiction, or through arbitration (out of court), and in two distinct ways, how much time each process can take in the bankruptcy/liquidation arrangement ? Will there be any other costs involved in the bankruptcy/liquidation process to be charged to the creditors' dues ?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  replied 2 years ago.
There are both state court and federal bankruptcy liquidations.

Presuming that either the company voluntarily files or is placed involuntarily into a federal bankruptcy, then the following describes the process.

First, creditors with liens on assets of the company get the lesser of the collateral value or their claim amount.

Then if there is cash after that, it goes to pay the costs of administering the bankruptcy. Then what is left over after that goes to the priority creditors (e.g. employees with unpaid wages earned within 90 days of the bankruptcy, customer deposits, taxes, etc.). If there are funds after that, they are divided pro rata among all other creditors (I'll call them the "general unsecured creditors"). If they are paid in full, then the money is then divided among the equity holders.

Since I don't know what form your investment took, then I can't say where you fall in this cascade. If you have liens, you would get first money out. If you invested as a creditor, you would be in the general unsecured creditor class. If you were an investor (which your question implied), you are at the back of the line.

The process will likely take 1-2 years in my experience.

Yes, the trustee and his attorneys' fees come out ahead of the creditor claims (other tan secured claims).

Let me know if I missed any part of your question!
R
grantlawpc, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31
Experience: United States Bankruptcy Code: Chapter 11 Business Attorney; Restructuring and Recoveries
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United States Bankruptcy Code: Chapter 11 Business Attorney; Restructuring and Recoveries