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Bankruptcy Lawyer Riverton Utah

Bankruptcy Lawyer Riverton Utah

When you need help to file bankruptcy, or someone has filed bankruptcy on you, call Ascent Law for your free consultation. We have bankruptcy attorneys on staff who are very familiar with the court process and can help you. Creditors in a Chapter 11 bankruptcy can play a vital role in supervising the role of the liquidator. In a Chapter 7 or 13 case, not so much. If you are a creditor in a Chapter 11 bankruptcy, hire the services of an experienced Riverton Utah bankruptcy lawyer to represent you.

How best to supervise the liquidator depends on the facts of the Chapter 11 case. A smaller case is likely to require less sophisticated supervision than a large one. A case in which the liquidation process is complex and multifaceted requires more supervision than one involving a small number of assets or just one or two items of litigation. If the debtor conducts a business preconfirmation, which is consistent with post-confirmation liquidation (e.g., sales of land in a discreet development), less supervision is required than if liquidation were not within the debtor’s ordinary business activities.

Protection of the Liquidator

An experienced Riverton Utah bankruptcy lawyer will ensure that the liquidator discharges his responsibilities in a fair manner and as required by Utah bankruptcy law. One of the liquidator’s first responsibilities is to ensure that the liquidation process and the representatives of creditors who conduct it are protected from unwarranted lawsuits. This requires a balancing of goals. On the one hand, lawsuit insulation is needed to provide assurance to the liquidator and the creditors that actions taken in good faith and furtherance of the liquidation process will not result in personal liability. On the other hand, creditors must, of course, have some recourse against a dishonest or incompetent liquidator. Finally, in certain situations protecting the estate and its representative from parties outside the liquidation process is more important than protecting parties within the process from each other.

The first problem area is the potential for litigation involving the liquidator’s conduct of the business, either pending or during the liquidation. The plaintiff may be either outside or within the process. A liquidator operating a business after confirmation of a plan of reorganization is susceptible to suit if he or she commits a tortuous or contractual wrong in connection with the operation of that business. A liquidator might also be attacked for his or her wrongful conduct of the business by one of the beneficiaries of the trust.

The liquidator might also inherit problems from the Chapter 11 case itself. For example, the liquidator may be responsible for holding assets with environmental problems. If the liquidator fails to handle these matters properly, he or she could be held personally liable for violations of environmental laws. Similarly, the liquidator who is not the Chapter 11 Trustee may be held liable for a failure to pay taxes or other governmental claims.

The plan of reorganization and other enabling documents should limit the liquidator’s liability to wrongful conduct that is willful, reckless, or grossly negligent. This type of provision is customary and the only practical protection available. The plan and other enabling documents should also provide for indemnification of the liquidator and others who may be vulnerable to suit for his or her conduct after confirmation of the plan.

Directors’ and officers’ (D&O) liability insurance may be available to the liquidator and the group governing the liquidator’s conduct. Ordinarily, D&O liability insurance is expensive to obtain for a debtor who is fresh out of Chapter 11 and undergoing liquidation.

To the extent that money or property come into the liquidator’s possession, he or she should be bonded. While these bonds are expensive, a creditors’ committee that fails to require a bond for a liquidator may find itself subject to criticism (and perhaps a lawsuit), if that liquidator breaches his or her trust.

Liquidator’s Attorney-Client Privilege

The liquidator has the ability to assert or waive the attorney-client privilege on behalf of the debtor. Problems arise when one or more members of a creditors’ committee does not fully understand the importance keeping matters discussed within the committee confidential. In the early stages of the liquidation, a liquidator and supervisory creditor group should determine what information will be disseminated to committee members and when it will be disseminated. The committee may want to restrict certain areas of confidential information to a subcommittee. Other than that, little can be done except to impress upon committee members the importance of maintaining the confidentiality of discussions within the committee.

Avoiding the Appearance of Impropriety

Liquidators must strive to avoid the appearance of impropriety. Typically, the liquidator is overseen by a group of creditor representatives. Usually, the largest creditors are on the supervising creditors’ committee. Frequently, one of these creditors has a substantial issue regarding the validity or enforceability of part or all of its claim. This individual creditor may well have both the ability and desire to intimidate the liquidator in order to discourage an objection or to receive other favorable treatment for its claim. A liquidator in this situation clearly has a problem. Certainly, the governing documents need to be drafted in such a way that the liquidator will not be discouraged from objecting to any particular claim, especially the claim of a creditor sitting in oversight. This issue can be dealt with in one of several ways. If necessary, court intervention can be requested. A less expensive solution is to require a substantial plurality of the oversight committee members to object to compensation. In the event that plurality is achieved, the governing documents can also require that court advice be sought.
A practical and efficient way for the liquidator to handle this situation is to be very open and thorough in communicating with the members of the committee. Communication is the key here. All of the objections to the large claims should be communicated to the full committee in order to head off this issue in advance. The liquidator should communicate equally and completely with each one of the members of the governing body of creditors. This approach should help avoid a confrontation with one of the substantial creditors sitting in judgment of the liquidating trustee’s fees.

Funding the Liquidating Trust

The liquidator and the creditors frequently discuss how much money to hold and how long to hold it. Taxes can be an important issue. The first amount is set aside, after consulting with the trustee’s tax advisors, to cover any potentially conceivable tax liabilities until the liquidator is ready to close the estate and all the returns due to be filed have been blessed by the IRS. A delay of several years in closing the estate is not unusual for this reason. The liquidator must also hold back enough to cover all professional and trustee’s fees and maintain reserves sufficient to cover other liabilities that might be assessed against the liquidator. While maintaining this reserve may temporarily diminish the return to creditors, this approach is preferable to the liquidator facing large, personal liability for distributing money to the wrong recipients. In a liquidating trust established for the sole purpose of pursuing litigation, the trust must be funded at its inception with seed money. This amount is set aside at confirmation out of cash in the estate funds and used to fund the ongoing litigation. The fund may thereafter be increased with litigation proceeds as cases are settled or otherwise resolved. The liquidator often negotiates with his or her professionals for contingency fee arrangements or fee caps in order to avoid running out of money prior to the conclusion of litigation.

Compensation of the Liquidator under a Liquidating Plan

Compensation of the liquidator is negotiated in each case. The liquidator is typically identified in advance of plan confirmation. Compensation is addressed in the plan and disclosed in connection with solicitation of acceptances. If the name of the liquidator is not known until after confirmation, the plan should make provision for the negotiation of a compensation arrangement. In this instance, the plan should be flexible so that the committee or other entity empowered to oversee the liquidator can strike the best possible bargain.

The liquidator is commonly compensated on the basis of an hourly rate, an annual fee, a percentage of recovery, or some contingency or progress standard. Which of these ways of compensating a liquidator is best varies from case to case. In general, the larger estates tend to compensate the liquidator on more of an hourly rate, and the smaller estates tend to compensate the liquidator on a success-based formula. Typically, compensation plans provide for a minimum hourly rate. With all but the very largest billion-dollar estates, an incentive, or “kicker,” is used to motivate the liquidator to maximize the assets available for distribution. The incentive may be based on a percentage of the amount of money distributed in the estate or on the percentage of recoveries of the creditors under the plan. Obviously, the facts of each particular case control the weightings of compensation between hourly and contingency formulas. A prospective liquidator may decline the appointment if the method of compensation is not satisfactory. Flexibility on this particular issue is important. Without flexibility, persons who would otherwise be well suited to perform the role of liquidator may be unobtainable, resulting ultimately in detriment to the estate. The most effective liquidation is not necessarily the cheapest.

Compensation of the liquidator should be subject to some controls. Chapter 7 and Chapter 11 trustees are clearly subject to court control of compensation. The compensation of any other type of liquidator is subject to court scrutiny only when provided in the plan. The liquidating plan of reorganization should include a mechanism for review of the liquidator’s compensation under certain circumstances. Usually that mechanism relies only on the participation of the creditors’ committee or other oversight body. Court supervision is not usually required.

Duties of the Liquidator under a Liquidating Plan

The liquidating plan of reorganization should clearly define the liquidator’s functions. These functions are similar to those duties of a

Chapter 7 Trustee

While the functions may vary from case to case, the liquidator is expected to perform six general categories of duties: (i) protection of assets, (ii) operation of assets (to the extent appropriate), (iii) liquidation of assets, (iv) investment of funds, (v) administration of claims, and (vi) reporting to stakeholders. But much more flexibility is provided to the liquidator for performing these duties under a post-confirmation liquidation.

Protection of Assets

The goal is to maximize the present value of the cash proceeds of the estate which will ultimately be available for distribution to creditors. The liquidator must take whatever steps are necessary to protect assets of the estate. As in Chapter 7, the first task of a liquidator is to review the property of the estate and determine what steps need to be taken regarding maintenance, protection, and insurance. To the extent that such issues can be foreseen, the plan should provide the liquidator with general guidance in this area, as well as establish a procedure for making extraordinary decisions, such as the discontinuation of security or insurance.

Operation of Assets

Second, the liquidator may need to operate assets of the estate. Operations should not occur at a loss except under the most peculiar circumstances. One such circumstance arises when the operation of an asset preserves a “going concern” value that greatly exceeds the liquidation value. Another is when large noncash charges cause the operation to show losses for accounting purposes but nonetheless to generate positive cash flow. On the other hand, to the extent that the cost of maintaining assets may be offset by their operation, the liquidator has a clear duty to undertake that operation. The liquidator should have some leeway in overseeing operational assets that are part of the estate.

Liquidation of Assets

While the liquidator should have the authority to operate businesses owned by the estate, his or her true role is to liquidate those businesses sooner or later for the benefit of the estate. The liquidator should have the clear obligation to take appropriate steps to liquidate the estate. The mechanics of liquidation should be clearly set out in the plan. Liquidation by the liquidator without involvement of the bankruptcy court is often preferable. Nonetheless, some buyers, especially in connection with large asset dispositions, want an order from the bankruptcy court (“comfort orders”) approving the sale.

Investment of Funds

The liquidator has the duty to invest the estate’s funds. As a fundamental matter, the plan should provide that the liquidator invest the funds safely. Post-confirmation liquidations are often touted as being particularly superior to Chapter 7 liquidations in the flexibility that they provide for the investment of funds. The United States Trustee provides extremely restrictive and cautious requirements for depositing and handling of cash by a Chapter 7 trustee. Most creditors of bankrupt estates are willing to accept significantly greater risk in the management of the estate’s funds in exchange for the higher expected returns. The liquidator may hold a substantial amount of funds for fairly long periods of time between distributions. Accordingly, the liquidator needs to obtain the highest “safe” interest rate available. Also, the liquidator should be required to invest money with an eye toward its availability to pay costs and make distributions. Investments involving substantial, early withdrawal penalties should only be undertaken, if other funds are clearly sufficient for anticipated cash needs.

Administration of Claims

The liquidator has the principal responsibility of processing and, where appropriate, objecting to claims filed by creditors. The liquidating plan of reorganization should be structured to encourage prompt resolution of claim disputes. Eliminating improper claims improves the payout to those creditors who are entitled to payment, and resolution of a claim objection helps speed payment to all creditors. Maintaining substantial reserves against frivolous and disputed claims for a long period of time can be frustrating to creditors and may create other problems.

Seek Legal Help

An experienced Riverton Utah bankruptcy lawyer can represent creditors in a Chapter 11 bankruptcy, Chapter 7, or Chapter 13. The bankruptcy attorney will ensure that the liquidator discharges his responsibilities and acts in a fair manner.

Riverton Utah Bankruptcy Lawyer Free Consultation

When you need bankruptcy legal help, please call Ascent Law for your free consultation at (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC St. George Utah Office

Ascent Law LLC Ogden Utah Office

Riverton, Utah

From Wikipedia, the free encyclopedia
(Redirected from Riverton Utah)
Riverton, Utah
Old Dome Meeting Hall, Riverton, Utah

Old Dome Meeting Hall, Riverton, Utah
Location in Salt Lake County and the state of Utah.

Location in Salt Lake County and the state of Utah.
Location of Utah in the United States

Location of Utah in the United States
Coordinates: 40°31′14″N 111°57′19″WCoordinates40°31′14″N 111°57′19″W
Country United States
State Utah
County Salt Lake
Settled 1865
Incorporated 1947
Named for Jordan River

 • Mayor Trent Staggs
 • City Council Sheldon Stewart, Troy McDougal, Tawnee McCay, Tish Buroker, Claude Wells
 • City Manager David R. Brickey

 • Total 12.58 sq mi (32.59 km2)
 • Land 12.58 sq mi (32.59 km2)
 • Water 0.00 sq mi (0.00 km2)  0%

4,439 ft (1,353 m)

 • Total 45,285
 • Density 3,600/sq mi (1,400/km2)
Time zone UTC−7 (MST)
 • Summer (DST) UTC−6 (MDT)
ZIP code
84065, 84096, 84095
Area code(s) 385, 801
FIPS code 49-64340[2]
GNIS feature ID 1431862[3]

Riverton is a city in Salt Lake CountyUtah, United States. It is part of the Salt Lake City, Utah Metropolitan Statistical Area. The population was 45,285 as of the 2020 census.[4] Riverton is located in the rapidly growing southwestern corner of the Salt Lake Valley.[5]

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