How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask John A. Flynn, Esq. Your Own Question
John A. Flynn, Esq.
John A. Flynn, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 202
Experience:  14 Years Experience in Bankruptcy - Mid-South Super Lawyer
Type Your Bankruptcy Law Question Here...
John A. Flynn, Esq. is online now
A new question is answered every 9 seconds

I am selling an S corporation in the state of New York. They

This answer was rated:

I am selling an S corporation in the state of New York. They payments are installments over a period of years based on the companies gross revenues. How can I protect myself agains the possibility of the company or the buyer going bankrupt? Please be as
specific as possible. I will send your response to my attorney (non bankruptcy) as she is writing the contract. I assume there are a few options... any advise would be greatly appreciated. Thank you very much!!
Well, you cannot really protect yourself against the possibility of them filing bankruptcy at all. However, what you can do is make the installment sale a secured debt, so that if they do file bankruptcy, you have a security interest, or lien, on the assets of the company. If there is real estate, you will want the buyers to execute a mortgage in your favor to the company's real estate. If there is valuable personal property you would want a lien in, you may need to have your attorney get the buyers to execute certain UCC documents evidencing a security interest and file those with the New York Secretary of State. That is about the best you can do. This is why banks are much more likely to give out secured loans than unsecured ones.
John A. Flynn, Esq. and other Bankruptcy Law Specialists are ready to help you

Related Bankruptcy Law Questions