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Los Angeles Corporate & Securities Law Blog

What does the trustee or administrator do in a Chapter 11?

When a Los Angeles business makes the decision to follow through and file for Chapter 11 bankruptcy, there will be many issues that must be dealt with as the case moves forward. It can be a traumatic decision to make, both personally and professionally. Add in the complex business bankruptcy issues that might not be fully considered or understood and the process can be difficult to handle. It can help to understand the basics of the business bankruptcy process, including what it is that the U.S. trustee or bankruptcy administrator does.

The Chapter 11 bankruptcy has a U.S. trustee whose job it is to oversee the administration and its process. Everything surrounding the filing will be considered for oversight with the bankruptcy. When there is a Chapter 11 bankruptcy, there must be a meeting with the creditors. This is also referred to as a section 341 meeting. Both the creditors and the trustee can question the debtor under oath at this meeting. It can center around the acts of the debtor, the properties he or she has, their conduct and how the case is being administered.

Adhering to securities law when pursuing an IPO in Los Angeles

Companies in Los Angeles that are trying to improve their business through an increased amount of capital available will often consider initial public offerings. While there are numerous advantages to this, it's also important to move forward with it in the right way by not running afoul of the SEC and violating securities law. The last thing a company going public wants is for there to be an investigation as to the propriety of it. Knowing the SEC and its rules is the first step to ensuring there are no issues that will arise.

There are many reasons why a company will choose to file for an IPO, otherwise known as "going public." They include raising capital and increasing the chance for companies to garner capital in the future; increasing the amount of liquid cash and making it easier to sell stock; acquiring another business; attracting and compensating employees by offering stock and options to receive stock; and to raise the public profile. While these advantages are attractive, companies thinking about initial public offerings also need to remember other issues that can come up.

What are the benefits of California reverse mergers?

Doing business in Los Angeles can be a difficult process. There are many issues that have to be considered when trying to succeed. One is deciding when it might be beneficial to consider various kinds of mergers. Reverse mergers are complex business transactions that have certain benefits and risks that must be assessed before moving forward. Those who understand what the process is and the potential benefits of a reverse merger will be in a position to make an informed decision as to whether it's a preferable option or if other strategies will be better.

In a reverse merger, a private company is acquired by a "shell company." This shell company is publicly reported, but has limited or nonexistent operations. Often the private company wants to get into the U.S. markets and gain capital. For garnering greater access to capital markets and a liquid influx of cash from stock being on the stock exchange or a market, a private company might want to think about a reverse merger. If it is a privately owned company, there is a limit to the kinds of equity it can get. On the other hand, public companies can receive funding from a larger number of investment entities.

Why to consider raising venture capital for your company

With the upturn of the economy as of late, your business may be booming. You know what they say, when the getting is good, get going. With this in mind, you may be considering an expansion to ensure the continued success and growth of your business. Sometimes this requires a significant financial investment to get the expansion up and running.

To reach your goals, you and your business may want to consider venture capital as a resource. It is not typically recommended that a successful business drain all of its assets at a time of significant growth, which is why venture capital is such a great alternative. Though potentially beneficial, whether it comes in the form of an initial public offering or IPO or another source of funding, venture capital can raise many complicated legal issues. We have the legal knowledge necessary to explain the process and advice to protect business owners' and investors' best interests.

Federal Trade Commission: Premerger notification program

It is no surprise to business owners that there are several regulations at both the state and federal level that their business must adhere to. If a business fails to meet legal regulations then the business and its owners could face serious penalties. Larger corporations are subjected to the strictest regulations. The Federal Trade Commission regulates certain aspects of everyday business interactions and decisions to ensure fair trade.

The Hart-Scott-Rodino Act was enacted by the FTC in order to keep closer tabs on large corporations who have agreed to a merger. A merger is when two businesses combine to form one company. Mergers happen all the time and were even more frequent in the last several years due to the economic recession. Typically, one company acquires the other with a lump settlement and then "merges" all assets and liabilities into one single company.

A popular CA based clothing retailer files for bankruptcy

Among the recent string of retail-based company bankruptcies is a company who was very popular with 20-somethings once upon a time. California based Wet Seal has released a statement that it has filed for Chapter 11 bankruptcy. For those following the company, this has not come as a shock because the company's stock price has lost 98 percent if its value in the past year.

After careful consideration, the board of directors for the publicly traded company announced its plans for Chapter 11. Despite the complex business matters, it seems the company is taking the proper precautions to ensure the bankruptcy process is as smooth as possible. The bankruptcy appeared imminent in early January when a representative for Wet Seal announced that it would be closing two-thirds of its store fronts in 2015.

What is the SEC and what does it do?

A recent post on this blog discussed how emerging businesses want to pay careful attention to their legal affairs in order to avoid facing a substantial fine or other penalty for the federal Securities and Exchange Commission (SEC). While some Los Angeles, California, residents probably have a good idea of what the SEC is and what the federal agency does, others, including business owners, may honestly want more information about the organization.

Congress created the SEC during the era of the Great Depression. Many people lost all of their savings in the stock market when the market crashed in 1929. Some of the losses could have been prevented by requiring those who were offering stocks and bonds to disclose truthfully the full extent of a person's potential risk and return. As it stood, many people during that time wound up with stocks and other investments that had no value.

Understanding how Chapter 11 bankruptcy works

It is often quite difficult to build and grow a successful and profitable business. There are many things along the way that can derail an entrepreneur's plans or threaten the longevity or sustainability of the business. Many businesses take on a significant amount of debt initially in order to get started. However, if the market changes or the business suffers extensive losses, it may find itself in a position where it is unable to pay its existing debts and financial obligations. This is where Chapter 11 bankruptcy, also known as business reorganization, can come in.

In order to begin a Chapter 11 bankruptcy, a bankruptcy petition must be filed with the bankruptcy court where the business is domiciled. There are two different classifications of bankruptcy petitions: voluntary and involuntary. If a petition for bankruptcy is voluntary, it means that the debtor, or the business, filed the petition. In contrast, an involuntary petition is one that can be filed by certain creditors of the business.

Building a business without running afoul of SEC regulations

Businesses in Southern California must constantly adapt to change. Customers, markets and work dynamics are always changing, and if the business can't adapt to these changes, it could be in big trouble. Added on top of this is the constant change of state and federal securities law. If publicly traded businesses don't keep up with the laws and make sure they are complying with regulations, they could find themselves facing steep fines or worse.

After the economic collapse of 2008, federal regulators came under a lot of criticism for not doing more to prevent the catastrophe. While the economy has, thankfully, recovered quite a bit since then, there is still a good deal of political pressure to make sure investors, traders, bankers and other businesses are not risking another crash.

Healthcare company continues pattern of mergers and acquisitions

Growing and maintaining a successful business can be tough. Regardless of whether it is a new start-up or an established company, the demands on satisfying customers, responding to market changes, and dealing with the competition never let up. One of the ways that a company can continue its growth and increase its profit potential is through mergers and acquisitions, as demonstrated recently by an expanding healthcare company.

U.S. HealthWorks continues to increase its market presence and availability for consumers by recently acquiring three additional medical centers in Orange County, California. The three centers recently acquired-two locations of Tustin Irvine Medical Group and an East Edinger Industrial Urgent Care-all provide a range of medical services, including preventative services, exams related to employment, rehabilitative care, diagnosis and treatment. These acquisitions follow the earlier acquisitions by U.S. HealthWorks of California Occupational Clinic of Los Angeles and IndustriCare. With the three newest acquisitions, U.S. HealthWorks now boasts 73 locations in California alone, not to mention numerous others across the country.