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- Ask yourself the following questions:
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- Are goods in transit?
- When was the last time the goods or services were supplied?
- Are you under contract to continue to supply goods or services?
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- Decide who will attend hearings and, if needed, file and pursue objections for you.
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- An automatic statutory stay goes into effect on the filing of the case and halts all actions by creditors to collect prepetition debt from the debtor or against its property, with limited exceptions.
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- Put a “hold” on pending litigation, administrative, or other proceedings against the debtor.
- Separate prepetition debt and invoices from post-petition debt and invoices and only apply post-petition payments against post-petition invoices.
- Seek court permission to terminate or modify a contract post-petition or to exercise a contractual or state law right of set off (I.e. to apply a security deposit against a delinquent lease payment).
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- Decide whether to stop goods in transit not yet in the debtor’s possession, unless the debtor is paying cash for delivery and then make sure the Debtor has the authority to make the payment.
- Determine the value of goods the debtor received within 20 days of case commencement you sold to the debtor in the ordinary course of business as this claim may be a priority claim in the case.
- Investigate if you could be a “critical vendor” entitled to be paid for unpaid prepetition services or goods early, because you are critical to the reorganization effort.
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