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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38888
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am the CEO of a company (S Corp State of California) that

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I am the CEO of a company (S Corp State of California) that has filed Chapter 7. A breach of contract with a supplier caused my companies collapse therefore my company has a lawsuit against the supplier. We are expecting to win or settle the case therefore it would result in my company becoming solvent. Is it possible for a company who files bankruptcy and after the lawsuit, which is currently owned by the Trustee, to continue business under the same name, tax id number, etc. or do I have to start over with a new name once this is over.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.

Re your current question, a Chapter 7 transfers all legal and equitable rights in the filing organization to the bankruptcy trustee for the benefit of the unsecured creditors. The trustee's obligation is to "administrate" the estate. This means that the trustee must sell all of the assets and attempt to pay all of the liabilities. Once this is done to the extent the trustee deems possible, the trustee closes the case -- at which point, whatever assets that are not administrated, are abandoned to the petitioner -- in this case, the corporation.


You are entitled, as is anyone else, to offer to purchase the shares of the corporation from the trustee and continue to operate the business. It's simply a negotiation between you and the trustee. You are clearly the most likely purchaser, unless the business is of the sort than can be easily operated by others (e.g., gas station, liquor store, etc.).


Note: California law is much more complex than the law of any other state jurisdiction. I do not have time to review the answers to your previous questions -- however, it is my general observation that non-California attorneys in this venue routinely misinterpret California law -- mainly because I find myself just as routinely having to correct such misinterpretations when answering subsequent questions from Californa customers who receive incorrect answers from non-California lawyers. You may want to consider requesting answers only from members of the State Bar of California, when asking questions concerning California law.


Hope this helps.


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