What to Expect at a Commercial Bankruptcy Meeting of Creditors in NY
Filing for bankruptcy protection could save your business. To ensure that your company comes through the process in the best possible position, it is crucial that you know what to expect. One of the most important aspects of commercial bankruptcy is the section 341 meeting of creditors.
The bankruptcy 341 meeting is the point in the process during which the bankruptcy trustee and affected creditors can examine the debtor business. Here, our New York commercial bankruptcy lawyers highlight three things you should know about bankruptcy meeting of creditors.
Bankruptcy Meeting of Creditors in New York: What to Expect and What to Know
Appearance at a Bankruptcy Hearing is Mandatory: Under U.S. law (11 U.S. Code § 341), a bankruptcy trustee must convene and preside over a bankruptcy meeting of creditors without unreasonable delay. Appearing at a 341 meeting is mandatory. To be clear, a bankruptcy meeting of creditors is not technically a court hearing—meaning no bankruptcy judge attends the meeting. Still, a bankruptcy hearing is a serious matter, and it is an official legal proceeding.
The Bankruptcy Petition and Supporting Documents Should Be Provided Ahead of Time: Pursuant to bankruptcy regulations, the business bankruptcy schedules and relevant supporting documents will be provided to the trustee prior to the meeting of creditors. This is true whether your company is filing for Chapter 7 bankruptcy protection or Chapter 11 bankruptcy protection. In either case, the trustee’s responsibilities include confirming the validity and accuracy of paperwork. In preparing for a bankruptcy meeting of creditors, it is highly recommended that business owners closely review the bankruptcy schedules and the supporting financial documentation provided in advance.
An Examination Occurs Under Oath—Be Prepared to Answer Questions: The primary purpose of the bankruptcy meeting of creditors itself is to allow the trustee and creditors a chance to examine the debtor—meaning all parties who attend a 341 meeting on behalf of a business should be prepared to answer specific questions. Remember, the examination occurs under oath. Questions will vary based on the unique circumstances of the case. General issues that are likely to be addressed include:
The accuracy and completeness of documents and records;
The current and anticipated use of business assets/income; and
The plans for the future of the business.
As business bankruptcy filings are complicated, it is highly recommended that parties are represented by an experienced commercial bankruptcy lawyer. In fact, businesses must be represented by counsel in a business bankruptcy case. It is also not unusual for a bankruptcy trustee to ask for additional documents during the 341 meeting. Companies should be ready to comply with any reasonable request.
Call Our New York Commercial Bankruptcy Attorneys for Help
At Pierce/McCoy, our New York business bankruptcy lawyers have the knowledge, training, and expertise to serve clients across all types of industries. If you have specific questions about what to expect at a commercial bankruptcy hearing, we are here to offer guidance and support. To schedule a completely confidential commercial bankruptcy consultation, please contact us today. With an office in Manhattan, we represent clients throughout New York.