Legal Question in Investment Law in Pennsylvania

What is a "suite on a note?" Do you mean a lawsuit that was commenced BEFORE the company filed bankruptcy? Yes, it should be commenced before the company files, but the deciding factor will be whether judgment was entered or not. A person or party that holds a judgment will be in a higher priority than an ordinary unsecured creditor.

Bankruptcy freezes any lawsuits if judgments have not been entered yet or on the claims of anyone else. Bankruptcy acts like a protective shield around the company and it is called the "automatic stay." In order to get at assets, the creditor would have to petition the court to lift the automatic stay.

What kind of bankruptcy was filed? If it is a chapter 7, it means the company is going out of business. Whatever assets it has will be sold and the money will be paid out first for administrative expenses, then secured creditors, then perhaps employees and then every other unsecured creditor. This is a general guide - the actual claims that come in will dictate which are allowed or disallowed. Everyone who is in the same class must be treated alike, i.e., all employees are treated alike, all unsecured creditors are treated alike and so on. It may be that the unsecured creditors get little or nothing, depending on what assets the company held.

If the company filed a chapter 11, then the company plans on staying in business and wants to restructure its debt. Again, claims are paid in accordance with the company's plan and all creditors of the same class must be treated alike.

I do more counseling on consumer bankruptcy than I do on commercial bankruptcy. I do not know the amount of your claim, whether it is an unsecured or secured debt, if you have obtained a judgment yet or whether the company has even filed for bankruptcy and the jurisdiction. it need not be in PA and I cannot advise on the law of states other than GA, PA & NC where I am licensed.

Depending on the value of your claim, you might want to seek a bankruptcy attorney in the state where the corporation has filed or will file bankruptcy. If your claim is small, it is unlikely that you will recover much, but you can always file a proof of claim if there are assets in a chapter 7 or in a chapter 11 case. If no bankruptcy is filed, then you might want to commence suit soon and take your chances on recovering a judgment before the comany files bakruptcy. If it is under $8,000, you can try filing in magistrate's court if the company is a Pennsylvania resident. If not, then sue in the court of common pleas if Pennsylvania has jurisdiction. The case will be heard in arbitration if the sum is less than $25,000, but it depends on the county. Some counties may have a higher limit.

I am not sure why this is an investment question. Bankruptcy seems to be more proper.