More Than One Iron In The Fire

If you have run out of shows to binge-watch during the pandemic, we’ve got a recommendation for you. Milwaukee Blacksmith aired on the History Channel back in 2016 and is available to stream on Amazon. The show follows the Knapp family as they work on building their blacksmith business into something that can be passed on to the next generation. 

Throughout the series, the Knapps are always working on multiple projects. This creates challenges that drive the show’s narrative forward. Although some of the drama was probably amped up in order to make compelling reality television, it resonated with us. Most of our clients have more than one iron in the fire. 

Multipl Issues in Bankruptcy Are Common

Very rarely are the Milwaukee area businesses we assist face a single issue that is driving them toward bankruptcy. Oftentimes, several small issues have snowballed to the point that addressing them individually becomes impossible. By the time many business owners seek our advice on whether bankruptcy may provide a path forward, they are already facing several lawsuits. 

One of the benefits of filing for bankruptcy is that it is like hitting a giant pause button on all other pending litigation. Some of those cases will then get pulled into the bankruptcy case, while others are simply paused until the bankruptcy case is resolved. The official term for this legal timeout and shuffling of suits is an automatic stay. 

How Pushing Pause Keeps Things Moving Forward 

There are two reasons why stays are important from a public policy perspective. 

The first is the idea that nobody who has a claim against the debtor should be treated any better than others who are similarly situated. Pulling pending lawsuits into the bankruptcy case ensures that all creditors — instead of just the first to file — will get some sort of compensation. This also incentivizes settlement because those with a claim against the debtor get more information about the debtor’s full financial situation, and may discover that getting something through the bankruptcy process is better than getting nothing afterwards. 

The second reason the automatic stay is important is that it gives the debtor some breathing room. When a business is trying to use the bankruptcy process to restructure, pausing other legal actions is all but necessary. Creditors and those with claims against the debtor that will survive the bankruptcy have a better chance of getting something if the debtor can continue operations, so pausing things for a bit is really a win-win.

Milwaukee Bankruptcy Lawyers That Can Help You Hammer Things Out

Hanson & Payne, LLC is a trusted advisor to businesses, creditors, and commercial lenders in the Milwaukee area. Our experience working for these various parties gives us a keen insight into the negotiating that can be done while an automatic stay is in place. If you are looking for counsel that can help you strike while the iron is hot, we would be honored to take your call. Contact us today to schedule an initial consultation.