Diablo Management Group Services
Whatever your problem may be, DMG can assist you in navigating through the minefield of options and choices. There is no single choice that is optimal for all business situations.
Out of Court versus Court Settlements
| Out of Court versus Court Settlements | ||||
|---|---|---|---|---|
| Managed Liquidation | ABC | Chapter 11 | Chapter 7 | |
| Control of Process | Company Fiduciary Control | Creditor Control | Court Control | Trustee Control |
| Costs | Fees for Retained Professionals, If Required | Assignee Fee plus a Percentage of What is Returned to Creditors | Professional Legal Fees & Court Costs | All Funds Turned Over to Trustee |
| Time Involved | No Legal Process Delays | Dependent on Assignee/Creditor Cooperation | 120 Day Minimum | Indefinite |
| Control of Distribution | Company | Assignee/Trustee | Debtor-in-Possession with Court Approval | Trustee with Court Approval |
| Protection from Creditors | Exposure to Legal Challenges | Uncooperative Creditors Can Petition for BK | Automatic Stay | Automatic Stay |
| Creditor Claims | No "Objection to Claims" Process | No "Objection to Claims" Process | Proof-of-Claims Process | Proof-of-Claims Process |
| D&O Liability | Yes | Yes | Limited | No |
| Fiduciary Legal Exposure | Yes | Yes | No | |
| Trustee/Fiduciary | Fiduciary | Assignee | Debtor-In-Possession | Trustee |
| Asset Sale/Disposition | Contractual Agreements with Buyer(s), Creditors, Stockholders | Requires Creditor Approval | Court Approval | Trustee Obtains Court Approval |
| Legal Clarity | Provided by Contractual Agreements | No "Free & Clear" Order from Court | Court Approval | Court Approval |
| Completion of Non-Creditor Wind-Down Obligations | Yes | No | Yes | Yes |