Orderly Chapter 7 Wind-Down of Operating Business
CHAPTER 7 | BUSINESS LIQUIDATION | 2023
Served as debtor’s counsel for an automotive operating business in a voluntary Chapter 7 business liquidation, Case No. 23-40604, filed May 25, 2023 in the U.S. Bankruptcy Court for the Northern District of California. The firm used the Chapter 7 process to wind down operations and liquidate the company’s assets in an orderly, court-supervised manner — ceasing operations cleanly rather than through the disorderly, creditor-by-creditor collapse that often befalls small businesses outside of bankruptcy.
The Chapter 7 filing was the first phase of a coordinated, two-case strategy designed around the client’s overall situation: with the operating entity dissolved through Chapter 7, the firm then filed an individual Subchapter V Chapter 11 case for the business owner (Case No. 23-40605, described above) to restructure the personal guarantee liability that the owner had given to support the business. On October 11, 2023, the Chapter 7 Trustee filed the Trustee’s Report of No Distribution and the case closed soon therafter. After case closure, Debtor dissolved the corporation with the California Secreaty of State.
Result: Orderly Chapter 7 liquidation of operating business; paired with a Subchapter V filing to restructure owner’s personal guarantee debt
U.S. Bankruptcy Court, Northern District of California
