Assisting A Client With Bankrupt Customers
- Client: Industrial parts distributor
- Date: 2008
- Location: Chicago, Illinois
A major industrial parts distributor sought to develop an integrated strategy for its accounts receivable and customer credit practices, to better protect itself during these difficult economic times. Schiff Hardin teamed with the client to review its existing practices and develop practical strategies to minimize the risks associated with aging accounts receivables. We suggested improvements to the client's standard commercial forms, contracts and credit practices, and developed new strategies involving Uniform Commercial Code remedies for use with troubled customers prior to a bankruptcy filing.
For its customers that had already filed for bankruptcy protection, we helped the client implement procedures from the enclosed checklist, "The Proactive Creditor: 7 Practical Tips to Make the Most of Your Customer's Bankruptcy Filing." This checklist identifies a number of immediate steps to minimize losses when a customer files for bankruptcy protection, and provides guidance on how best to maximize the results of a customer's bankruptcy filing. It also identifies potential "critical vendor" treatment, available in certain jurisdictions to provide relief to essential creditors.