Modern day business can be complicated. Most business is conducted through corporate entities formed to provide a shield to the individuals “behind-the-scenes.” It is not uncommon to have more than one corporate entity created to shield the ultimate party. These corporate entities serve much the same way as the great curtain in “The Wizard of Oz”; they provide a “wall” or “veil” behind which the individuals can safely transact business while appearing to be much larger or greater than they would be without such protection. The difficulty arises when assets are hidden in the corporate structure thus resulting in a shield for an individual debtor against a creditor’s collection efforts. Jurisprudence has long recognized this potential problem, and case law exists to unwind this Gordian knot particularly when closely-held corporations are involved. These remedies are commonly known as “piercing the corporate veil.” To be successful, a creditor would need to prove […]Continue Reading
Bankruptcy and Creditors' Rights
Thompson Burton's Bankruptcy and Creditors' Rights practice is full service, assisting clients in all manners of insolvency proceedings. Our attorneys specialize in bankruptcy, receiverships, commercial loan workouts, creditors' rights, Ponzi schemes, and complex commercial litigation, with the ability to represent parties on all sides of a dispute including creditors, debtors, receivers, and trustees.
As part of its creditors' rights practice, Thompson Burton routinely represents financial institutions, corporations, governmental entities, and individuals in complex workouts, bankruptcies, receiverships, state and federal court litigation and judgment enforcement. Our attorneys are recognized for their ingenuity, experience, and practicality in representing the interests of commercial creditors.
Thompson Burton's attorneys also have extensive experience in representing corporate debtors in Chapter 11 bankruptcies, chapter 7 bankruptcies, receiverships and outside of court debt restructuring. Thompson Burton has the tools to represent every kind of debtor, from a small, single member LLC to a large, publicly traded corporation to successfully and efficiently achieve their restructuring goals.
Some of Thompson Burton's attorneys are also frequently retained to represent court-appointed bankruptcy trustees and receivers in evaluating and pursuing litigation assets in state court, federal court, and bankruptcy court. Thompson Burton is recognized as one of the leading insolvency litigation law firms in the Mid-South region due to the breadth of its experience and its success in such litigation.
Thompson Burton's multi-faceted approach to its insolvency practice enables its attorneys to examine complex legal problems from all angles, and to craft legal strategies and solutions that are most effective and efficient for its clients.
Oftentimes a judgment creditor seems to reach the limits of available collection remedies when an execution is returned as “unsatisfied.” In most creditors’ minds, such a return means that there simply aren’t any assets sufficient to apply towards the outstanding judgment. As a result, most will simply wait a period of time before trying again or give up. Like most states, Tennessee has a remedy that permits a creditor to “dig deeper” into a debtor’s assets and financial history. It is commonly called a “creditor’s bill to subject,” and it can be found at Tenn. Code Ann. § 26-4-101. A complaint for a creditor’s bill to subject is an equitable remedy that can only be granted by a court once it is established that a debtor’s property sought to satisfy the judgment cannot be reached by ordinary process, is insufficient or is not subject to levy and sale by execution at […]Continue Reading
You’ve reached the end of the actual litigation and received a judgment. Now what? The initial answer is simple: enforcement and collection! There are many steps to take on the path to converting the judgment to cash. Some of the prior articles on this blog illustrate the complexity of converting the judgment to cash, but one of THE most important steps to take is the creation of a judgment lien. This article provides some hints and recommendations on how to subject a judgment debtor’s assets to a judgment lien. The Tennessee Rules of Civil Procedure provide general insight into this process. Rule 69 sets forth the various ways to execute on a judgment. At first blush, these rules seem complete yet there are specific statutes that should also be considered to make sure the creditor is fully encumbering a debtor’s interests. The general belief among most creditors is that recording […]Continue Reading
First, let me state this disclaimer: Each of the following songs by Pink Floyd are copyright-protected. As a result, to avoid infringement on any marks or protected works, no artwork or song links are included. Sorry, you’ll have to dust off your LP’s, CD’s or digitally stored music library to listen to these songs. Second, you are undoubtedly wondering how in the world the music of Pink Floyd relates to Creditors’ Rights issues. Actually, they don’t. I just wanted to grab your attention. Now that I have it, here are five things issues that you should be wary of when preparing or drafting loan documents in Tennessee. It is very easy to become “comfortably numb” to these issues over time since much of the financial process becomes rote. “Us and Them” (The Dark Side of the Moon 1973): UCC and Real Estate Title Searches. It is essential to spend […]Continue Reading
II. Reconciling Unintended Statutory Conflicts This is the second part of the two-part series examining Tennessee’s sole remedy for creditors seeking to exercise post-judgment rights against a debtor’s interests in limited liability companies. In this part, we examine some of the issues arising with the interpretation and interplay of the Limited Liability Act and the Revised Limited Liability Act. One potential argument against issuing a charging order against a judgment debtor’s interest in a limited liability company is an apparent statutory conflict in the provisions of the Act and the Revised Act. As previously stated, §§ 48-218-105 and 48-249-509 both provide that the sole remedy of a judgment creditor seeking to enforce a judgment against the membership interests of a judgment creditor is a charging order but this remedy is tempered by limiting the available rights to an assignee (the Act) or a transferee (New Act). Of interest, and in […]Continue Reading