Baldwin Demise
In a chapter 11 bankruptcy, commonly called a reorganization,
the bankrupt company is protected from continued harassment from creditors
while they "reorganize". The company will attempt to come up with a plan
of repayment to creditors, usually at a reduced percentage of the amount
owed. The first thing any creditor must do is find out if they are on "the
list" or schedule of creditors which the bankrupt company provided to the
court when it filed for bankruptcy.Then if they are, or get themselves
on the list via the clerk of the appropriate bankruptcy court, the creditor
will receive a proof of claim to file with the courts. This will establish
the amount of debt owed so that if and when a distribution is available
the creditor can get paid.
Realistically, the courts and secured creditors
must determine various classes of debtors and the level of entitlement
to claims prior to any final bankruptcy proceedings in court. In other
words, without prejudicing the court as to priority of claims, classes,
or levels of priority, will set forth who gets paid, how much, and when.
In most instances some creditors may be classed as necessary for the company
to operate and hence may get paid ahead of all other classes of distribution
as part of the on-going day to day business of the company, usually controlled
by the bank providing operating capital to take care of secured creditors
only.
I wouldn't count on the claims of piano techs to
rate very high, but stranger things have happened. I have seen companies
attempt to pay favorite creditors under the table to try and keep certain
companies (piano techs?) in good standing only to see the courts take the
money back, sometimes years later when they found out that they were treated
as preferential creditors. 'Course when you're dealing with millions of
dollars and a payment of a couple of hundred is involved, well, it might
slip thru the cracks.
Good luck to all involved with Baldwin!
Joseph Alkana
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