Vendors Selling on Credit to the Chapter 11 Debtor: Opportunities and Risks
1 hour 30 minutes
Learn the risks associated with providing credit to a Chapter 11 client as well as what actions can be taken in the case of nonpayment.
This topic will discuss the opportunities and risks for a credit professional with selling to a Chapter 11 debtor. The material will also discuss administrative priorities, selling on credit in Chapter 11, vendors’ liens and cross-collateralization provisions. What steps should you consider to maximize payment on your pre-petition debt when a customer files, as well as limit credit risk on any future sales? Review voluntary filing requirements including where the customer may file (why Delaware?), first day motions, dealing with the debtor and post-petition sales, stopping goods in transit, set off rights and automatic stay. Additionally, allowance and payment of reclamation claims, the Chapter 11 plan, preference risk and waivers, creditors’ committee and the bar date will also be discussed.
• You will be able to discuss the critical vendor trade doctrine.
• You will be able to recognize the trade lien program.
• You will be able to identify the major players in bankruptcy proceedings.
• You will be able to describe stopping goods in transit and reclamation.