Liquidating agents

In particular, the directors and officers of an insolvent corporation or LLC (one whose assets are worth less than its liabilities) have a statutory duty to minimize losses to the company's creditors.

But no matter how your business is organized, you commit fraud if you give away or sell business assets at below market rates or put your interests ahead of those of creditors.

Don't expect to get more than 80% of an assets value, at most.

Your main options are to return the property or to "assign" the lease contract to someone else (the lessor will usually have the right to refuse an assignment, however).

You'll want to try to get the secured creditor or lessor to settle for less than the amount you owe on the loan or lease; see Nolo's article Paying Off Debt When You Go Out of Business.

Request refunds on your workers' compensation premiums and liability insurance premiums, if your policies' terms allow it.

(Get more information on accounts receivable factoring.) Don't cheat your creditors.

Do what you can to get a good price for your business assets—not just for yourself, but because you have a legal responsibility to your creditors to try to get fair market value for your assets.

Leave a Reply