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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 111449
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Is there any way to stop company that breached contract from

Customer Question

Is there any way to stop company that breached contract from filling bankruptcy just to avoid lawsuit or settlement?
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 5 years ago.
Unfortunately, absolutely none at all. If they are filing bankruptcy all you can do is file for a relief from stay and then file as creditor in their bankruptcy. But if they qualify for bankruptcy then I am afraid you are going to have to fight as a bankruptcy creditor.


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Customer: replied 5 years ago.
Does that means that we will not be able to recuperate our losses?
Expert:  Law Educator, Esq. replied 5 years ago.
If they file bankruptcy you would not recover all of your losses and depending on how bad their debts are you may only recover pennies on the dollar or none at all if they go into bankruptcy. Of course this could also be a scare tactic to force a lower settlement and they may not actually qualify for bankruptcy.
Customer: replied 5 years ago.
Well considering that they are part owned by very well known Transportation company with IPO of over 800 M, that could possibly be the case. I do have a feeling that they are using it as a scare tactics but i do have inside info that they also have some companies owe them considerable amount of money. So i would not like them to use other debts to clear their own debts.
Expert:  Law Educator, Esq. replied 5 years ago.
Just because they are part owned by another solvent company, they are a separate company and could still end up bankrupt and it depends on their own debt/asset situation, not their parent company's.
Customer: replied 5 years ago.
Understood.
Expert:  Law Educator, Esq. replied 5 years ago.
Thank you.

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