Why File a Chapter 7 for a Corporation?
I asked this very question of a nice gentleman I met yesterday. He wanted me to file a bankruptcy petition for his flat puppy corporation. I pointed out that such a filing would not discharge the debts of the corporation. He knew that. I told him I’d have to charge him to file the Chapter 7 for the corporation, and to attend the First Meeting of Creditors with him, and to attend the probable Rule 2004 exam with him if the trustee wanted to know more about the flat puppy. He knew that. I pointed out that he’d have to list ALL the debt and ALL the assets, and explain where the assets went if they’re not there, and if he sold them he’d have to account. He knew that. I pointed out that such a filing would not discharge HIS personal guarantees. He knew that. I pointed out that the corporation does not survive the process; the legislative history says that after the corporate estate has been fully administered, the corporation simply ceases to exist. The legislative history says that’s to pr
