Legal Question in Bankruptcy in Indiana

LLC &Ch.7

Good Morning, We are creditors in a bankruptcy proceeding, prior to the bankruptcy filing, he defaulted on a contract w/our corp. We sued, & we were awarde a default judgment against him last April, he filed that July. What are the chances of getting paid? The other creditors are a bank, and subcontractors . The subs have filed liens against a property he owns , now the trustee has filed a motion to be the attorney in this and wants to sell property for less than half of what is owed the bank & the home is 90% finished in an upscale subdivision. Also, the trustee has named a specific buyer,a friend of the filer. The filer is not an honest person and I'm worried that something isnt right. Filer didnt show for the meeting of creditors either. Thanks for any help.

Asked on 3/14/07, 6:11 am

1 Answer from Attorneys

John Bator Bator Redman & Shive

Re: LLC &Ch.7

The most important thing is that there is probably a deadline to object to the sale. I strongly advise retaining counsel to review the sale motion with you and your alternatives.

Generally, the best way to defeat a sale motion is to bring another buyer to the table as the Court is only interested in maximizing dollars for the unsecured creditors.

Although the mechanics lien will attach to the proceeds of the sale, it sounds like there is little chance of realizing enough to pay everyone, however, under Indiana law the bank could be forced to share pro rata with the subs if they were led to believe they would be paid from the bank loan.

Most attorneys do not charge for an intial consultation. Make sure you find one with construction and BK law expertise

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Answered on 3/14/07, 6:22 am

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