How to find Bankruptcy Business Reorganization Small infomation ?

Edwards Finance > Loans

Q. Here is a legal question(regarding the Bankruptcy) need your suggestion. Company AA is in Chapter 11 reorganization right now, because it cannot pay back to the creditors, Company AA plan to apply bankruptcy and close. But the company AA's major secured creditor will get all AA's Asset (Technology, Patent, Contract), and start another new company BB. BB will come back to hire some of the AA's key people, and continue to the the same business as AA's, certainly under the name of BB but not AA. Is Company BB the "Successor-In-Interest" of Company AA? (According to the business law). What's the bottom line for Company BB to be the Successor-in-Interest of Company AA?

A. In terms of the secured creditor's and bankruptcy trustee's (and AA's principal's) alternatives, notice an important distinction that bears on your questions: You say that the secured creditor purchased all of BB's assets then formed a new company, which, however, will be doing business with the AA name (since the name and trademarks related thereto are presumably part of the assets purchased). But as an alternative (which in the circumstances -- namely, the likelihood there would be people asking the question you do -- the secured creditor would not want), the trustee could have sold AA, the company, whereupon, infused with the new capital supplied by the secured creditor, AA would renew engaging in business. - The first is that one can answer a generalized question like yours -- which isn't the right question to ask anyway (see below) -- "[a]ccording to the business law" as if "the business law" didn't include "bankruptcy law" and the results of a federal bankruptcy proceeding. And the second is that "successor-in-interest" is some sort of magic Rule such that, if it (the Rule) applies ("successor-in-interestNESS"?), whatever it is you would like to happen (and one can guess what that is) will - and why? well, because BB is the "sucessor-in-interest" of (to?) AA; of course.

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