Companies that file for protections under bankruptcy law are often seeking to either restructure their businesses or liquidate assets. Commercial bankruptcy trustees oversee the transactions of a business that has applied for and received such protections.
These trustees are responsible for ensuring that the business meets all of the terms it agreed to as part of the bankruptcy process. Companies unable to do so may be sold by the trustee to cover outstanding debts, which appears to be the case with a Soddy Daisy, Tennessee, tax business.
The poor health of a tax preparer allegedly led to debts that were unable to be covered through normal means, and the preparer was consequently subject to involuntary bankruptcy. Many of his clients claimed that they trusted the tax preparer with money for investments and were promised high yields on the returns. The investors allege that payments stopped coming after a time.
Decosimo and Company has been requested to handle the sale of the company, pending approval from a Chattanooga bankruptcy judge. The tax company’s outstanding creditors have scheduled a meeting to be held in the Chattanooga Bankruptcy Court’s basement on Jan. 8.
Business owners facing serious financial struggles need to be aware of the available protections offered under the bankruptcy code. Many facets of law govern the transactions that a bankruptcy trustee may undertake on behalf of a business, and having an experienced legal advocate on the side of the bankruptcy filer is indispensible.
Source: The Chattanoogan, “Bankruptcy Trustee Selling Jack Brown Tax Service,” Dec. 11, 2012