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Titans of Mavericks, LLC Files for Bankruptcy Protection

bankruptcy-protection.jpgAccording to reporting from The Mercury News, Titans of Mavericks, LLC, a surfing events and lifestyle brand headquartered in San Mateo County, California, recently filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Central District of California. Court records and reports indicate that the company is attempting to use the bankruptcy process and the Chapter 11 bankruptcy protections to help ensure that its assets and intellectual property are able to be sold off to a new buyer.

Selling Assets While in Chapter 11

When a company can no longer operate profitably, and when the company sees no realistic path to move towards profitable operation in the future, it is left with two options: 1) close the business and liquidate the remaining assets; or 2) sell the assets to another firm that may be able to continue operating the business. There are many different reasons why another firm may be able to operate a business even though your firm cannot sustain it. In many cases, this occurs because the other business has the ability to absorb key aspects of your company into their already existing operations. When done successfully, this type of arrangement has the potential to benefit all parties involved, including even the creditors. However, it can be very difficult to sell a company while it is encumbered with debt. Through the Chapter 11 reorganization process, buyers and sellers may be able to use unique advantages that can allow a sale of assets to go forward in a smooth and efficient manner. Some of these advantages include:

  • The existence of the automatic stay. This is a legal tool that provides bankruptcy filers with temporary protection against the claims of creditors. This is valuable as these creditor claims may otherwise prevent a sale of the business.
  • The ability to receive additional capital from lenders that might be needed to facilitate the sale. Additionally, Chapter 11 can give parties the legal right to transfer business assets free and clear of liens and other claims. This can help make business assets far more appealing to potential buyers.
  • Finally, Chapter 11 protections can provide much needed security to prospective buyers. More specifically, buyers can purchase assets knowing that they can receive both a court approved expense reimbursed if they are outbid and without worrying that they may be hit with a fraudulent conveyance claim after the completion of the sale.

Contact Our San Jose Office Today

If your business is saddled with overly burdensome debt obligations, it may be time to consider bankruptcy. At Diemer, Whitman & Cardosi, LLP, our skilled San Jose bankruptcy attorneys have guided many companies through the complex Chapter 11 filing process. To find out more about what we can do for you, please contact our office today to set up a free case evaluation. We handle bankruptcy claims throughout Northern California, including in San Francisco and Oakland.

Source:

http://www.mercurynews.com/2017/01/31/mavericks-surf-contest-organizers-file-for-bankruptcy/

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