Legal Question in Bankruptcy in California

Bankruptcy

A company I invested in some 4 years ago is filing Bankruptcy under Chapter 7. The company is a Nevada Corporartion . The court where the case is being filed is in Riverside Ca.There is a meeting of creditors & deadlines on 15 June 1999. Am I considered a creditor ? Further, (in a case like this)should I assume that my shares in the company are lost? If so, what are I taxable options??? Can I claim the investment as a loss and Should I receive notification of the same from the company? I very much appreciate your assistance. I thank you in advance!!

v/r


Asked on 5/18/99, 1:02 am

1 Answer from Attorneys
Marcus G. Tiggs Slate and Leoni, A Professional Corp

Re: Bankruptcy

As a shareholder of this Corporation, yes you are most likily considered a creditor as far as the Bankruptcy Code. It would appear if you received notice of the 341(a) hearing the Corporation considered you a potential creditor.

It may be premature to consider your shares of stock being lost. However, keep in mind that a Corporation does not receive a discharge under a Chapter 7. Simply, it is the role of the chapter 7 trustee to sell whatever assets the debtor corporation may have, and pay creditors according to their priority under the Bankruptcy Code.

You tax questions would be better addressed by a CPA or other tax professional.

Best of luck!!

Slate and Leoni, PC

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Answered on 5/21/99, 4:48 pm


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