Legal Question in Business Law in California

Re: Small claim court against bankrupted business

No.

JOEL SELIK

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Re: Small claim court against bankrupted business

If a Chapter 7, unless you can first obtain bankruptcy court approval and show that there was fraud involved, or the bankruptcy is or was denied, unfortunately you might well be precluded from going after the company in small claims court. If its filing was under another chapter of the bankruptcy code, you might still have time to file a formal claim in bankruptcy court. Check out the bankruptcy court web sites to obtain a claim form.

Re: Small claim court against bankrupted business

No. Immediately upon filing a petition in bankruptcy, the debtor is protected by an "automatic stay" of all debt-collection activity against it. Your recourse is through the bankruptcy court. You could file a claim as a general creditor, but you might be entitled to make a priority claim on the theory that your money was received by the agent in trust for the airline and never really was the agent's property. You should contact the airline involved; they may have received the money and/or hold some kind of deposit or insurance to reimburse travelers against agent defalcations. If the amount of money involved warrants it, you might want to have an initial consultation with a bankruptcy attorney and bring up the agency or trust funds concept.