I Did Not File Bankruptcy But I got Sued by The Chapter 7 Trustee?! Now What?

Posted by on Jan 12, 2012 in Creditor's Rights in Bankruptcy | 0 comments

Recently, I assisted a company in the service sector that was sued by the Chapter 7 Trustee  because of its business dealings with a corporate debtor who had filed a chapter 11 case that was later converted to chapter 7.   The trustee was conducting a due diligence search by filing lawsuits against many of the corporate debtor’s vendors, including the company that I assisted.

Naturally, the officers of the company I assisted were anxious about being sued and didn’t understand why this was happening when they provided proper services in return for the money they earned from the corporate debtor.   It is important not to become frustrated or fearful of such a situation.  Instead, it is important to take control by learning about one’s options and seeking honest & knowledgeable bankruptcy counsel for advice.

In this case, it became clear quickly that the trustee simply sued so parties would comply with turnover of documents related to payment of services.   However, it is important to understand when this scenario is true and when the trustee may truly be suing you or your business with intentions of seeing it through.

Consult with multiple bankruptcy attorneys in such a situation and choose the attorney who is most honest, trusthworthy, and with whom you are most comfortable.

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