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Posts tagged "Chapter 7"

California Cities and Counties are Poised to Substantially Increase Assessment of Documentary Transfer Taxes on Stock Transfers in Corporate Entities

In an opinion handed down on June 29th, the California Supreme Court held that notwithstanding the legislature's decision against localities imposing excise taxes on transfers in ownership of stock, it did, however, intend for localities to impose documentary transfer taxes on stock transfers in property-holding entities. In particular, the Court held that Cal. Rev. & Tax. Code §§ 64(c) and (d) applied to transfers for consideration resulting in more than 50% ownership of voting stock in any partnership, LLC, or other entity where the stock transfer effectively changes the owner of the beneficial interest in real property. Unless the stock transfers concern an entity federally-taxed as a partnership and the transfer does not result in a technical termination of that partnership, a city or county is empowered to ignore the corporate form, reassess the underlying real property, and impose documentary transfer taxes for every property held therein. While documentary transfer taxes can be de minimis in amount in cases concerning an individual property, this decision could have a substantial impact on the purchase of large entities, both in and out of bankruptcy. Practitioners who oversee the purchase and sale of business concerns should take note that cities and counties are poised to assert documentary transfer taxes on a range of stock transactions in the future. A copy of the published opinion 926 North Ardmore Avenue, LLC v. County of Los Angeles is available by hyperlink here.

Report highlights need for debt relief among high net worth athletes

If you're a business owner or an individual with significant assets and you're burdened with heavy debt, then you may have a number of debt relief options, including Chapter 7 bankruptcy, Chapter 11 bankruptcy or out-of-court solutions. The reality is that businesses and individuals may go through numerous ups and downs in their financial lives, and if you're in a serious lull right now, then don't hesitate to explore every available option for returning to financial health and profitability. 

Debt relief options for California business owners

If you're a business owner with debt troubles, then you're not alone. The risks associated with running a business are high, and bankruptcy laws take that fact into account. Heavy debt obligations may necessitate filing for bankruptcy, but depending on your particular situation, you may have a number of options for out-of-court solutions.

Will an out-of-court workout settle your business debts?

There is always risk in starting or purchasing a business. If things don't go as planned and your business is facing insolvency, then the bankruptcy system in the United States provides options for a fresh start. Bankruptcy can be a key component in helping business owners keep their companies intact or move on to new opportunities.

Shulman Hodges & Bastian LLP: Representing creditors and committees

Bankruptcy and other insolvency-related matters can be extremely complex, especially if there are many parties involved. Whether you're a creditor, debtor or trustee, a single slip-up could expose you to costly liability, and it is crucial that you have experienced legal counsel to identify the important issues and aggressively protect your interests.

LA sound effects company to sell assets in Chapter 11 auction

If you're considering business bankruptcy, then you have a variety of options, and the path you choose will depend on the specifics of your business. If personal liability is an issue, then Chapter 7 bankruptcy may be the appropriate route. With Chapter 7, an automatic stay is placed on creditor actions, including foreclosure, repossession and garnishment.

Chapter 11 or Chapter 7: Which is right for your business?

Risk is a part of business. You can take action to minimize risk, but there may still be unforeseen events that result in losses. The Bankruptcy Code takes into account risk and offers protections for debtors and creditors. At Shulman Hodges & Bastian LLP, we help businesses choose the appropriate debt relief option, whether it's restructuring the business through Chapter 11, a liquidation under Chapter 7, an out of court workout, an assignment for the benefit of creditors, or a formal dissolution.

BAP holds that post-petition earnings earned during Chapter 11 revert to debtors upon conversion to Chapter 7

The U.S. Bankruptcy Appellate Panel for the Ninth Circuit ("BAP") recently held in Wu v. Markosian (In re Markosian), BAP No. NC-13-1339-JuKiD (9th Cir. BAP March 12, 2014), that a bonus earned by the debtor by his employer for services performed while the case was pending in Chapter 11 reverted to the debtors upon conversion of the case to Chapter 7 and was not the property of the Chapter 7 bankruptcy estate. Earnings received post-petition in a Chapter 11 case are generally the property of the estate under Section 1115(a)(2) of the Bankruptcy Code but are not the property of the estate in a Chapter 7 case under Section 541(a)(6) of the Bankruptcy Code. The BAP based its decision on Section 348(f)(1)(A) of the Bankruptcy Code which excludes a debtor's post-petition earnings from the property of a Chapter 7 estate upon conversion from a Chapter 13 case. The BAP found no difference between the conversion of a Chapter 13 case to a Chapter 7 case versus the conversion of a Chapter 11 case to a Chapter 7 case. However, in Markosian, the case was originally filed as a Chapter 7, converted to Chapter 11, and then converted back to Chapter 7. The BAP, citing to Magallanes v. Williams (In re Magallanes), 96 B.R. 253, 255 (9th Cir. BAP 1988), found that property of the estate is determined as of the filing date of the Chapter 11 petition, not the conversion date. In this case, on the Petition Date, the case was originally filed in a Chapter 7 case, so Section 541(a)(6) of the Bankruptcy Code excluded post-petition earnings from the estate. Thus, income that came into the Chapter 11 estate is recharacterized as the property of the debtor upon conversion. Query whether the Court would come to the same result if the filing was originally commenced as a Chapter 11 such that on the petition date, post-petition earnings were property of the Chapter 11 estate.

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