【破产法】CHAPTER 7 BANKRUPTCY FOR COMPANY| 杨清泉律师

Chapter 7 bankruptcy for a company means that the corporation of LLC is no longer interested in continuing to

operate, for whatever reason, and seeks a bankruptcy trustee to liquidate its assets for distribution to its creditors.

After completion of the Chapter 7 case, then dissolution of the company is the next step. It is not the other way around.

Once the trustee renders its findings that it has investigated the assets of the case and found that the company has no

viable to assets to liquidate for distribution to creditors, that is a finding of fact that the company is truly bankrupt and

can no longer operate, and more importantly, the point of the bankruptcy filing is to have all creditors of the company

officially notified that the company has tried its best to pay its debts, but is unable to, because it no longer has any

viable assets to liquidate for distribution to the creditors.

For example, debtor is a C corporation which was in import & distribution of furniture. Before the pandemic started, it

had been operating for 5 years, profitably. Because of the pandemic, business slowed and never made the level of

business back to before the pandemic started. In other words, the business is losing money every month. The

business obtained a $150,000 SBA loan to keep the business afloat. Since the business never recovered, it is now

unable and has no capacity to repay the SBA loan, as well as its several suppliers who are owed $500,000. The

inventory is down to $100,000 and there is no money to pay the warehouse rent of $10,000 a month.

The owners of the company decided to throw in the towel. They have no new money to invest in the company and it

just does not make any more sense to continue operating without the prospect of profitability in sight. The SBA has

sent letters to collect the $150,000 loan and the suppliers are threatening to sue. The landlord of the warehouse is

threatening to evict debtor if last month’s rent is not paid.

Filing for Chapter 7 will get the bankruptcy trustee and the bankruptcy court into the dire situation immediately. The

bankruptcy automatic stay or injunction will be sent officially by the bankruptcy court to all creditors of the company,

including the SBA informing them that the company can no longer operate and seeks as a last step to have the trustee

investigate its assets to see if there are assets to liquidate to pay creditors and the SBA. The creditors are given 90

days to file their proof of claim to inform the court how much they are owed.

A 341 meeting of creditors, conducted by the bankruptcy trustee is held by zoom about 30 days after the case is filed.

At the hearing, creditors can attend and ask questions. The trustee will also ask questions to determine if there are any

viable assets to liquidate.

In this example, there is $100,000 of furniture inventory that the trustee may be interested in liquidating. If he is

interested, he will file a notice of auction sale for the inventory. A successful bidder may bid $20,000 for the $100,000

inventory. If the trustee accepts the $20,000, the inventory will be sold to the successful bidder, and the trustee will use

the $20,000 payments to distribute equally and proportionately among all creditors including the SBA.

If there are no interested bidders, then the trustee will abandon the inventory and inform the court that the inventory

has been abandoned.

The landlord may claim ownership over the inventory once it is abandoned and sell it to anyone to pay for unpaid rent.

In some instances, tenant neighbors might be interested in physically transferring the inventory to their own

warehouse for free but need labor and trucks to make the transfer to their own warehouse.

After the trustee determines its findings that the company has no assets to liquidate, it will officially declare.

This company has no assets to liquidate, and nothing is available to pay creditors including the SBA.

This is a good clean end to the bankrupt company. Dissolution can then proceed as there is a trustee finding of fact

that the company is bankrupt.

Thus, all creditors are officially notified that the company is bankrupt and cannot pay its debts. End of story. You do

not have to worry about the SBA and creditors filing lawsuits to collect the debts of the company and doing a debtor

examination of the CEO. All you show are the bankruptcy records and findings of fact of the trustee that there are no

assets to liquidate. It is a certificate of death of the company issued by the bankruptcy trustee. Otherwise, the SBA and

creditors will keep on trying to collect and beat a horse that they think is still alive and kicking, when in fact the horse

is dead. The bankruptcy findings of fact are the conclusive legal evidence that the company is bankrupt and cannot

pay its debts.

Of course, a company bankruptcy has nothing to do with the individual owners of the company. A company by

operation of law has a distinct and separate identity of its own. Owners of the company are not personally liable for the

debts of the company unless they signed a personal guaranty. SBA loans below a certain amount normally do not have

personal guaranties of owners.

Disclaimer: None of the foregoing is considered legal advice for anyone. There is absolutely no attorney client

relationship established by reading this article.

PRAYING ALWAYS HELPS

It also helps to pray to our God, His beloved Son, Jesus Christ, and the Blessed Mother Mary for divine protection against

financial problems, because we have a God who loves us and His beloved Son, Jesus Christ, showers us with infinite mercy. All

we have to do is humble ourselves and pray to the Sacred Heart of Jesus for a drop from his ocean of infinite mercy. Jesus

revealed in 1930’s to Saint Maria Faustina Kowalska of Poland that all sinners which we all are and those who do not believe in

God and those who do not yet know Jesus, should all be brought to His sacred heart and be submerged in the ocean of His

infinite mercy, for the sake of His Sorrowful Passion. Anything you ask for when you pray the chaplet for His divine mercy will be

granted, if compatible with His will. Moreover, you are guaranteed a peaceful death.

What is the current proof that God and Jesus are divine and all powerful? I refer to exhibit A, the incorruptible body of Carlo

Acutis!

CURRENT ONGOING PHYSICAL PROOF GOD IS ALMIGHTY

INCORRUPTIBLE BODY OF CARLO ACUTIS DIED 2007 AT AGE OF 15

Look at the incorruptible body of the blessed Carlo Acutis who died at 15 in 2007. You can look at his body in Rome, Italy, now

14 years after his death. He looks like he’s just asleep in his jogging suit and rubber shoes! That is a perfect example of an

ongoing sign on earth that the God of Moses, our God, my God, is almighty and all-powerful that He even suspends the natural

laws of biology and physics without any effort. He resurrected His one and only beloved son from death on the cross. Indeed, He

has power over death.

I have thought, “What would the other religions believe if they saw the incorruptible body of the blessed Carlo Acutis? I think

even Buddha, if he were alive today, would believe that Yahweh is the one True God.” No need to think about reincarnation and

nirvana because his incorruptible body is available for all to see in Rome, Italy. We will not need any kind of explanation on the

efficacy of modern-day mummification. Come on, man, which is all bull. The truth is in plain sight. Believe your own eyes that the

one true God is all-powerful, and His name is Yahweh, “I am who Am.” He is the alpha and the omega, the beginning, and the

end.

“ETERNAL FATHER, WE OFFER YOU THE BODY, BLOOD, SOUL AND DIVINITY OF YOUR DEARLY BELOVED SON,

JESUS CHRIST, OUR LORD AND SAVIOR, IN ATONEMENT FOR OUR SINS AND THOSE OF THE WHOLE WORLD, FOR

THE SAKE OF HIS MOST SORROWFUL PASSION, PLEASE HAVE MERCY ON AMERICA AND THE WHOLE WORLD.”

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in Law practice for thirty years. He specializes in

Bankruptcy, Business and Civil Litigation and has handled more than five thousand successful Bankruptcy cases in California. He speaks

Mandarin and Fujian and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 20274

Carrey Road, Walnut, CA 91789 or 1000 S Fremont Ave., Mailstop 58, Building A-10 South Suite 10042, Alhambra, CA 91803.

CHAPTER 7 BANKRUPTCY FOR COMPANY