August 2023 - MPL Law Firm

We Can Rebuild It, Better, Stronger, Faster – Chapter 11

If you remember The Six Million Dollar Man, there was a famous line at the beginning of the show: “We can rebuild him. We have the technology. We can make him better, than he was. Better, stronger, faster”.

In the US Bankruptcy system, Chapter 11 is the Six Million Dollar Man option for companies that are in financial trouble. Okay, maybe the two aren’t totally analogous, but the goal is very much the same. The company is hoping to emerge better and stronger (whether it comes out the other side like Col. Steve Austin or Peter Griffin from Family Guy).

A company that files a Chapter 11 does so to restructure their debts and make a fresh start. The business will first propose a reorganization plan to the US Bankruptcy Court. If the plan is accepted, the business continues to operate with the goal of emerging as a viable and functional entity.

The bottom line is that the company and its management team in a Chapter 11 need to make some hard choices if it is going to come out of this process successfully. If it does not, then the other alternative is to close its doors and liquidate (i.e., a Chapter 7 Bankruptcy), which we will get into next week.

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.

Litigation – Once the Train Starts Rolling, Its Hard to Stop!

You have tried just about everything to resolve a dispute. Meetings, some back and forth with letters from an attorney, maybe even mediation…nothing is working. What’s next? Well, one option would be to let it go and move on. However, if that’s not on the table, your only other option is to try and resolve the matter in court.

If you truly want to follow through and settle a dispute via the court system, I am letting you know that once the train starts rolling, it’s hard to bring it to a stop. Filing a complaint and following through all the way to being in front of a judge (possibly with a jury) could be a long and arduous process. It can get even more complex if the other side is well funded and has an experienced litigator.

Whenever I get a client pushing to sue, I make sure that they are mentally and financially prepared for a potentially long battle. I also let them know that the actual costs will continue to mount until an ultimate resolution occurs and they may not be recoverable. To give you some perspective on things to consider before engaging in litigation, I thought the articles below may be of interest:

This will wrap up our series on dispute resolution. More times than not, the dispute has its roots in a breakdown in communication. The more that you and the other side can openly and honestly communicate, the less of a chance that a dispute will need to be settled in the legal system.

Here are a few other things that may be of interest:

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.

Arbitration – Out of the Frying Pan and Into the Fryer

Last week we talked about mediation and its usefulness as a dispute resolution process. If mediation did not work (or you just bypassed this process totally), the next step is to go to court or, in the alternative, agree to arbitration. In my view, this is like stepping out of the frying pan and into the fryer. Depending on which process is chosen, the cost increases and the results may not be what you want. For this week’s post, we will discuss why arbitration may be a useful dispute resolution process to consider.

Arbitration is an alternative dispute resolution process that handles a matter outside the courts with an arbitrator (or arbitration panel). The parties typically agree to this type of process at the execution of an agreement to resolve any disputes. Below are some advantages and disadvantages of agreeing to arbitration versus going to court:

Advantages

Arbitration allows the parties to choose their own rules and arbitrator;
Arbitration can often be faster than using the courts;
Arbitration awards are typically confidential; and
Arbitration awards typically have very limited ways to appeal.

Disadvantages:

If the parties agree that arbitration is mandatory and binding, they waive their rights to access the courts;
Depending on the rules, the ability to conduct discovery may be more limited in arbitration or entirely non-existent;
Arbitration decisions typically have limited ways to appeal; and
In order to enforce an arbitration award, a party must still resort to the court system if the other party does not comply.

Next week, we will review going to court as an option.

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.