Blog

It is presumably widely known in the small business community that “responsible persons” can be held personally liable for not paying trust fund taxes to the federal government. A “responsible person” is one who controls the payment of funds within the business as distinguished, for example, from an accounts payable clerk who simply follows orders on which creditor to pay when and how much. But is it possible that a “responsible person” could be held personally liable for non-trust fund federal taxes, as well?

The sale of real estate in foreclosure actions by receivers is handled differently from state to state. With Ohio, Kentucky and Indiana all upholding different laws about the subject, what do you need know about the differences?

The Supreme Court of Ohio ruled in an opinion issued Nov. 21, 2012 that the 365/360 method of computing interest provided in a promissory note is not ambiguous and is enforceable. Under the 365/360 method, the amount of interest payable to a bank is computed by using a shorter 360-day year and not simply by using the “annual interest rate” provided in the note.

Borrowers have recently ...

Within a few days after a debtor files a bankruptcy petition, the Clerk of the Bankruptcy Court sends a written notice to all creditors identified by the debtor.  The notice informs the creditor of the bankruptcy filing and provides details including instructions about filing a proof of claim.  In the bankruptcy context, a claim is a right to payment.  A form for the creditor to complete to state its claim and mail to the court is enclosed with the notice.

Debtors in chapter 11 reorganizations frequently seek to sell some or all of their assets.  The sale process almost always includes an auction, often begun with a stalking horse, or initial, bid that is subject to higher and better offers.  Purchasers are reluctant to spend time and money for due diligence that would ultimately benefit another bidder at the auction.  The seller-debtor solves this problem by agreeing to pay a break-up fee if the stalking horse bidder is not the winning bidder at the auction.  The amount of the break-up fee is negotiable, usually structured as a percent of sale (e.g., 1-3%) or as a lump sum payment (e.g., equal to actual expenses incurred).

Businesses that suffer losses on unpaid invoices when a customer files bankruptcy frequently have salt applied to the wound by being asked to return payments received from the debtor-customer. The federal Bankruptcy Code permits recovery of payments made by the debtor within 90 days of the bankruptcy filing (referred to as a “preference”) under certain conditions.