What to do with Biz assets?

[justbeach03]

I am an S-corp with a 4 secured leins (pers guar)-planning on filing in 2 months. I will be closing 2nd location in a month-and plan on filing Ch7 in 2months. I have been approach by a couple that wants to buy the 2nd biz assets (everything) FMV, but what should I do with that money? Split it equally to the secured leins or is it "first in time...first in line"? It's ok to pay secured creditor more than $600 (preferential payments) correct?

[justbeach03]

Does anyone have experience with Biz asset liquidation?

[frogger]

What has your attorney recommended to you?

[HHM]

Usually, it will be first in time, first in line. Unless, the secured creditors have specifically identified the items.

Correct, there is usually no preference issue with secured creditors.

[StartingOver08]

You can sell your assets for FMV. You can pay your secured creditors the funds, more than $600, without it being a preferential payment.

Do consult with your attorney for your specific info. What you are proposing is considered one of the best ways to enter the Ch 7 with a small business. Here is a link with additional info for you http://www.moranlaw.net/business-bankruptcy-FAQs.htm

The key is "Fair Market Value" and arms length transaction. Make sure to keep not only the sale documentation, but all the documentation for your distribution of the proceeds.

[justbeach03]

Thank you sooo much! This forum has been VERY enlightening. Wish I had found it 5months ago. I've decided that I'm going to have to draggg this out till May next year, due to bad advice from previous attorney about a property transfer. So, I'm planning to use the money from the closed biz to pay the secure creditor monthly over the next year. Do I need to pay them all equally with regular payments to avoid pref payment? Reason I ask, is 2 are larger than others and have higher monthly payments due.

[justbeach03]

Just got done seeing attorney and he said it's easier and less problems occur if I just walk away from business and let the trustee figure it all out and who gets what cash from assets. But that if I wanted to sell it to the couple (bank will get more $ that way) then to contact the first in line bank and make a deal on what they will accept...get it in writing.

[frogger]

Just got done seeing attorney and he said it's easier and less problems occur if I just walk away from business and let the trustee figure it all out and who gets what cash from assets.

Good advice.

[CRBK]

Agree that is good advice. You're just asking for trouble if you try to play trustee yourself, and you may even give away more than you need to.

[bobkerry]

for this you must first go through the rules and regulations related to the business. afetr this you can file the case as per your demand and thus you can liquidate your asset too....
this is also an easy process but requires time...

[frogger]

for this you must first go through the rules and regulations related to the business. afetr this you can file the case as per your demand and thus you can liquidate your asset too....
this is also an easy process but requires time...

Huh??? You want to explain this "easy process"?