248-539-5500
31313 Northwestern Highway, Suite 200 Farmington Hills, MI 48334

Over 65 Years of Combined Debt Relief Experience.

Business Wind-Downs

Business Wind-Downs - pieA business wind-down or liquidation is another out of court alternative that allows the business Debtor to liquidate and wind down its business affairs without court supervision. This process is done with the knowledge and consent of the secured creditor(s) who may have a security interest in the assets of the Debtor.
 
Ordinarily, the Debtor can liquidate the assets and realize a greater recovery for the secured creditor if the Debtor is permitted to handle the liquidation. If a business Debtor’s principal(s) has/have given (a) personal guaranty(ies) to the secured creditor(s), the Debtor has an incentive to maximize the recovery for the secured creditor in order to reduce the exposure on the personal guaranty(ies).
 
If a secured creditor refuses to allow the Debtor to handle the liquidation, then the assets are usually surrendered to, and then liquidated by, the secured creditor. In most cases, the assets are not worth what the secured creditor is owed and the principal(s) are left with a large deficiency obligation owed to the secured creditor on the personal guaranty(ies). In that case, the individual principals are usually forced to consider their own bankruptcy options. In cases where there is no secured debt, the Debtor can still do an out of court liquidation, and work out a payment plan to distribute the proceeds to the unsecured creditors.
 
Business Wind-Downs - business-liquidation-attorney