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Questions tagged [bankruptcy]

Use this for questions about insolvent entities that are unable to repay their creditors, and the processes surrounding this.

Bankruptcy is the legal status that an insolvent entity has when it is unable to repay its creditors. Depending on the jurisdiction, bankruptcy may be limited to natural persons, and additional sanctions may be placed upon the bankrupt.

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Is Intentional Bankruptcy Illegal?

This is a completely hypothetical scenario and so I'm happy for answers for any jurisdiction, however I'm based in the UK and so some of my terminology may be specific to there. What is the legality of establishing a limited company, paying myself…
Luke
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Would a lifetime gym membership be subject to bankruptcy proceedings?

A person in the state of Washington purchases a gym membership that entitles them (and them alone) to visit the gym for the rest of their lifetime, in exchange for a single lump sum payment. A few years later said person fails to pay down their…
JonathanReez
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What is the state of intellectual property when the owner goes bankrupt?

A company makes a great game called "AwesomeGame" that costs 20€. They sell thousands of copies of the game, but ultimately go bankrupt. What is the status of the game at that point? Do any intellection-property rights or protections of it still…
Fortune
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How can a different company make a sequel if the original game company goes bankrupt?

Say a game company goes bankrupt but another company wants to make a sequel. Is it possible for the other company to obtain rights to make a sequel? Who would they even contact about this?
Trevor
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How to legally ensure the practical utility of a long-term warranty that might outlast the life of the issuer?

General construction company is selling a 50 year roof. Furthermore, they are selling a 50 year roof with a 50 year warranty by them. Said general construction company has existed for 8 years. I have no reason to believe they will exist in 50 years…
Joshua
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Do early termination fees hold up in court?

Adobe is being sued by the FTC for including an unadvertised 50% early termination fee (ETF) in their “annual paid monthly” plan. The FTC seeks to have Adobe recompense the users, make cancellation easy and efficient, ban similar practices, and even…
Therac
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May companies get away with defaulting on debt if they have no large creditors?

According to my financial management textbook (which of course itself might not be accurate), An involuntary bankruptcy petition may be filed by creditors if both the following conditions are met: The corporation is not paying debts as they become…
In Hoc Signo
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Does the USA actually have debtors prison or jail after a court order?

Okay, I know officially the answer is "no, there is no such thing as debtors jail for civil debts in the USA", however let's explore this. Suppose a person is sued by a creditor for a debt. Normally what happens of course is there is a court date…
Boshy 1984
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Property ownership of liquidated company

Around a decade ago the company I was working for launched a new startup. It was owned by my company and I was tasked to work as a consultant helping them set up their IT infrastructure 50% of my time. As they were using completely different setups…
Cromon
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Why is court approval necessary to liquidate?

I found this article in the news, claiming that Sears Canada will ask court for permission to liquidate all remaining stores. I can't see why approval would be necessary. Why would it be illegal to close your own stores without approval? In what…
user489501
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Landlord's LLC filed for bankruptcy, is that a breach of contract?

My landlord owns and maintains the property I'm leasing though an LLC. The lease documents are between myself and the LLC. I was recently sent a letter that says that my landlord's LLC is filing for bankruptcy. He mentioned that future rent checks…
Cheesus Crust
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How can a person declaring bankruptcy afford a lawyer?

In most jurisdictions, a person overwhelmed by debt can declare a personal bankruptcy (for example, filing for a Chapter 7 bankruptcy in the United States, or for a Verbraucherinsolvenz in Germany). Reading articles on celebrities filing bankruptcy…
sleske
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How is property in trustees' hands safe from the trustee's own creditors?

In the context of trust law, trustees are the legal owners of the property in trust. They hold it for the beneficiaries, who are the equitable owners. Even though trustees legally own the property, what they can do with it is limited because they…
Greendrake
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Is there any legal recourse for a person who was impacted by a now-bankrupt corporation?

Corporation X has done something injurious to person A. Ordinarily, A can sue X in a civil court, for damages. If it was a bunch of persons, they can join in class action lawsuit against X. Surprise twist: After (class action) lawsuit was filed by…
user0306
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Can assets be protected from sale in bankruptcy by a contract not to sell them?

It is common to not be allowed to resell seeds obtained from growing genetically modified plants, as a condition of having the original seeds sold to you. But one might have several thousand dollars worth of such seeds as a business asset, which, if…
interfect
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