S-corp -sell or BK

[brown84]

What is the name of your state (only U.S. law)? NC

My wife and I own an S-corp business that's well behind on 2 advertising contracts (threatening action). The store lease is up at the end of next month (renew for 6 mths, yikes vacate??). Expenses too high, sales down. There is a lien on the inventory with PG. We have initial interested buyers but the expenses that can be reduce by a new owner looks like a hard sell. We only have self made financials as we have no cash to catch the CPA up. Also ,not sure if possible questions about the ad. contracts would kill the deal at negot., discovery or due diligence. Must disclose if asked, correct. If the proceeds are enough at the sale closing to pay the lien and the contracts, than we wouldn't need to disclose the debt?. successor liability?

Sales look too slow in next two months to go deeper in debt. Do I hard press the sale? go to BK lawyer now, ( but no money to pay attorney or court fees though)... or give notice to vacate leased property, close doors at month end, shut utilities, remove all inventory(w/ lien) and move somewhere else and beg mercy from banker (liquidate)..What is the name of your state (only U.S. law)? NCWhat is the name of your state (only U.S. law)?

 

[tranquility]

Are you sure either BK or a sale will solve your problem?

On a small S-corp it is unlikely you could get credit without a personal guarantee. I find it also unlikely that a sale of the business in such straits is going to get you out of the hole. (Even on a sale you would need an attorney to advise you on your duties. Fraud is a definate possibility in this situation when the buyers find out how things really are they will immediately think lawsuit.)

It sounds like you need an entire plan to get out from under this mess. I'd certainly start by not digging any deeper by signing for anything else on time or on credit. I think you need to see a BK attorney and a CPA. I know you cannot afford it, but it could save you years of trouble. The end result may be the same, except one happens sooner. How much is a couple of years of your life worth to you? Besides, who knows what the results might be when an expert looks at everything? It certainly isn't going to look worse than it does from your description.

 

[brown84]

Do I need to see a business BK lawyer and/ or a personal BK lawyer. Will they accept the case with out CPA financials? I guess I will have to stop aying other bills to pay the lawyer or ask for help from the family.

 

[tranquility]

I'd see a personal BK attorney first. The consultation will often be free. There you could see your personal risk to all this. Besides, he could probably handle a business BK as well. Let's face it, while you care about the business, what you really care about is you. Consider yourself first. Then look to the business.

The CPA can look at what you have and let you know where you stand. An hour or so and you will have a good idea if there is anything you are missing. At this stage you are looking to see your status and not looking for him to write-up your books. A good one can tell you a lot for a few hundred rather than the thousands it might take to really let you know in detail.

 

[brown84]

I saw a lawyer and he said to sell would be the best, but time is very short (2 weeks to renewal or vacate store lease) plus the successor liabilty could kill it he said. can't get wife to commit. Nothing positive would come of dual Bks. My poor children (3)


Wife and I are not in agreement to DO the BK. She's the Pres. of S-Corp. Do I need to do a Joint BK or single personal BK. I have a seperate job but most of the personal CC debt we've inccured is from business. She only has a few CC and signed the Ad contracts. Not sure if I can even drag her there.