Doing Business With A Customer In Bankruptcy: What You Need To Know

• Posted by Geoff Gussis on May 14th, 2007


• Filed in Guides, Tips and Practice Pointers, Uncategorized

You may dread hearing that a key supplier declared bankruptcy - but what about a key customer? What should you do if your customer seeks protection under US bankruptcy laws? A recent article by Cooley Godward LLP offers some tips:

An issue that comes up for creditors when a customer files bankruptcy is whether to keep doing business or end the relationship. Since debtors usually cannot survive without at least some level of trade support, generally they reach out to suppliers in an attempt to obtain trade terms, or at least a steady supply of goods, after a Chapter 11 bankruptcy is filed. Often they put information about doing business in light of the bankruptcy see this example from Delta Airlines on a restructuring website or send out written communications to suppliers.

Cooley Godward Kronish LLP - United States - Doing Business With A Customer In Bankruptcy: What You Need To Know from Mondaq (free registration required)