What is the name of your state (only U.S. law)? PA
A company, LLC, has filed chapter 7 in Pennsylvania. There are very limited assets but there are ~$200 thousand in outstanding receivables. These are contracts for work completed the final month(s) of the operations for major clients (construction) that have not been paid, but are for work completed and or not disputed and should be highly collectible.
The company has a line of credit and or business loan covered by a UCC to a bank. The company, due to the bank freezing assets and funds, and the clients not paying, was not able to make the final payroll taxes and owes the IRS ~$30-40 (before penalties and or interest).
Right now one of the major clients that owes the company money has sued the Bank and the Bankruptcy Custodian stating they (Bank/Custodian) cannot force them to release the money they owe the company filing chapter 7. They are in a legal battle right now. However the IRS has yet to even throw their hat in the ring, so to speak.
I know the company's owner(s) had a personal guarantee to the bank also for the LOC and or loans.
As a business owner/manager for years I've seen several times letters from the IRS asking if we owed "John Doe Contracting" any money because they were behind on payroll taxes, usually however the time period was from some time a year or two prior. The letter clearly stated DO NOT PAY them etc... and pay the IRS. We always were paid up with the person they were investigating so checked the box "we don't owe them" (to paraphrase) and sent that in. However in a bankruptcy case, and if the company filing's attorney has notified the IRS, would they (the owners of the company filing) not want the IRS in the mix, so to speak, right away so the large receivables coming in could be used to pay for taxes first? (I ask because it's my understanding that the taxes, penalties, interest etc...will follow the owners for life, and cannot be ever discharged in personal bankruptcy for the owners). Or does the bank's UCC filing supersede the IRS?
My fear for the owners is the bank and clients will duke out who owes what, the custodian will distribute accordingly and a year or two from now the IRS will come along saying ok, we now got to this and you owe $$$$. But by then the $ may already be gone and they will be personally stuck for life. I told them to get their attorney to be proactive and or help the IRS go after their cut to make sure they are covered first and foremost.
A company, LLC, has filed chapter 7 in Pennsylvania. There are very limited assets but there are ~$200 thousand in outstanding receivables. These are contracts for work completed the final month(s) of the operations for major clients (construction) that have not been paid, but are for work completed and or not disputed and should be highly collectible.
The company has a line of credit and or business loan covered by a UCC to a bank. The company, due to the bank freezing assets and funds, and the clients not paying, was not able to make the final payroll taxes and owes the IRS ~$30-40 (before penalties and or interest).
Right now one of the major clients that owes the company money has sued the Bank and the Bankruptcy Custodian stating they (Bank/Custodian) cannot force them to release the money they owe the company filing chapter 7. They are in a legal battle right now. However the IRS has yet to even throw their hat in the ring, so to speak.
I know the company's owner(s) had a personal guarantee to the bank also for the LOC and or loans.
As a business owner/manager for years I've seen several times letters from the IRS asking if we owed "John Doe Contracting" any money because they were behind on payroll taxes, usually however the time period was from some time a year or two prior. The letter clearly stated DO NOT PAY them etc... and pay the IRS. We always were paid up with the person they were investigating so checked the box "we don't owe them" (to paraphrase) and sent that in. However in a bankruptcy case, and if the company filing's attorney has notified the IRS, would they (the owners of the company filing) not want the IRS in the mix, so to speak, right away so the large receivables coming in could be used to pay for taxes first? (I ask because it's my understanding that the taxes, penalties, interest etc...will follow the owners for life, and cannot be ever discharged in personal bankruptcy for the owners). Or does the bank's UCC filing supersede the IRS?
My fear for the owners is the bank and clients will duke out who owes what, the custodian will distribute accordingly and a year or two from now the IRS will come along saying ok, we now got to this and you owe $$$$. But by then the $ may already be gone and they will be personally stuck for life. I told them to get their attorney to be proactive and or help the IRS go after their cut to make sure they are covered first and foremost.
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