Let’s call that rule #1 – hire an attorney with a proven track record in bankruptcy law. Rule #2? read Rule #1.
It may be tempting to work with someone you know or who knows your business, but they will likely struggle to work efficiently through the long haul of a bankruptcy proceeding. If your situation involves multiple creditors, government oversight, shared ownership and ensuring an ongoing business survives, you need a lawyer who has represented dozens of cases with complexities similar to yours.
Keep certain fundamental questions in mind as a mental checklist to guide your choice of the right attorney.
A. How complicated is my case?
- Is this more than just a simple tax issue?
- How many creditors will be impacted?
- Is this a one-time financial hiccup? Do I hope to restore health to the business once my debt is reconciled?
- Is my company subject to government oversight?
- How complex is the ownership structure? Will it involve other counsel? Do you have a unified front or are there contentious shareholders? Is your company public?
B. Do I have the funds to afford the legal expenses that accrue as bankruptcy proceedings play out?
- In interviewing an attorney make sure you fully understand the rates and fees they charge. In amassing the detail bankruptcies involve, a good paralegal is invaluable but you don’t want to pay him the same rate you pay an experienced attorney for her time spent filing the case with the office of the U.S. Trustee or in a hearing with a judge.
- How are incidental costs (travel, lodging, administrative) handled?
C. Talk to more than one attorney.
- Communication. Bankruptcies are typically long cases and you will be communicating a lot. Clarity is a two-way street. Your attorney needs to communicate clearly. You do too. Your attorney need to listen intently. You do too. If in your first meeting a prospective attorney is checking his smart phone as you are talking, dump him.
- Trust. Up front, ask a prospective attorney his or her opinion on what you can expect from declaring bankruptcy. Ask what are the best case and worst case scenarios. Beware of responses sounding too good to be true. The relationship you and your eventual attorney establish with each other must be founded on mutual honesty and trust.
- Experience. Ask how many bankruptcy cases the attorney has handled. How many in industries like yours? How many wins? How familiar is he or she with the U.S. Trustee’s office? The court? The judges and other bankruptcy attorneys?
As you take your company on to the swirling seas of bankruptcy, make certain to have alongside you at the helm, an attorney you can trust, one you can work with and you know has experience navigating these waters.