Legal Question in Bankruptcy in Indiana
Trading Services
As a company that is preparing to write off a large sum of money due to one of our clients filing chapter 11 bankruptcy, I pose the following question:
Is is acceptable under bankruptcy law to trade services with the company that is filing bankruptcy as to avoid writing off the balance? i.e. We do a service for them and they do services for us on a daily basis.
1 Answer from Attorneys
Re: Trading Services
It depends when the services are to be performed-before or after the bankruptcy. If before,the rules are complex and you must be careful to avoid creating grounds for a Preference suit by the trustee-seek counsel first or you could be forced to pay for the services you received before the bankruptcy and not get paid for the services you performed. If after the bankruptcy, you must get Court approval before entering into an agreement and performing the respective services.
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