Getting in Front of a Customer’s Bankruptcy

Commercial Chapter 11 filings registered their first year-over-year percentage increase since 2009 as the 5,309 filings during 2015 represented a 2% increase over the 5,188 commercial Chapter 11 cases filed the previous year, according to the American Bankruptcy Institute and data provided by Epiq Systems, Inc. And some financial experts predict current economic conditions could push those numbers higher. “Energy, steel, health care and retail are industries that are particularly vulnerable,” said Bruce Nathan, Esq., a partner with Lowenstein Sandler LLP.

At some point in their career, credit professionals will likely find themselves working with financially distressed customers that are at risk of insolvency. “Identifying the warning signs of a financially distressed customer months, and even years, before a bankruptcy filing and knowing what steps to take to reduce your company’s exposure could help mitigate any adverse impact to your company,” he said.

Using his more than 30 years of experience in bankruptcy, restructuring and insolvency, Nathan will present NACM’s upcoming webinar, Bankruptcy Rumblings: How to Best Position Your Company in Advance of Customer Bankruptcy, from 3-4 p.m., Feb. 10. The program will cover the early warning signs that characterize troubled companies at risk of a bankruptcy filing and the available sources of information credit executives can access to become aware of these risks.

Nathan will demonstrate via numerous examples and recent case studies how these warning signs mushroom toward the inevitable. Nathan will also review what questions credit professionals should ask and what information they should obtain from a financially distressed, privately held customer. Attendees will learn how they can use this information to protect their firm from the risk of nonpayment as well as utilize available legal tools to reduce terms and improve the likelihood of payment of claims against a struggling customer.

-- Diana Mota, associate editor

Register for the webinar on the NACM website.

No comments:

Post a Comment