EndingtheVenture（二）.pptVIP

Ending the Venture Chapter 17 Bankruptcy Overview Statistics on Bankruptcy Frequency Breakdown of types Lessons from Bankruptcy Don’t diversify too much Bankruptcy only protects from creditors Can be difficult to separate owner and company Don’t wait too long Don’t hide it Bankruptcy Act of 1978 Purpose Three types of Bankruptcy Chapter 11 Chapter 13 Chapter 7 Chapter 11- Reorganization Least severe Process Present case Design a plan Extension Substitution Composition Divide interests If affected, tell how Agreement Surviving Bankruptcy Can be used to restructure and reorganize Don’t file for Chapter 11, unless you mean it Be prepared for creditor’s to examine financial statements Understand the process and what is protected Transfer litigation to bankruptcy courts Prepare realistic financial plan Prepackaged Bankruptcy Settle debts before legal proceedings Process Creditor Benefits Other Applicant Benefits Applicant Drawbacks Chapter 13- Extended Payment Plans Sole proprietorship Unsecured debt less than $100,000 Secured debt less than $350,000 Chapter 13 Order of priority Secured creditors Administrative expenses Claims from business operations Wage claims up to $2000 Contributions to employee payment plans Claims by creditors Taxes General Creditors Chapter 7- Liquidation Voluntary v. Involuntary Bankruptcy Reorganization Strategy Successful strategy Prepare a plan Sell plan to secured creditors Communicate with creditors Don’t write checks you can’t cover Keep Venture Going Avoid Excess Optimism Develop Effective Marketing Plan Good Cash Projections Know the Market Environment Identify Stress Points “I Have a Bad Feeling About This” Warning Signs of Bankruptcy Materials to meet orders are lacking Payroll taxes are not paid Suppliers demand payment in cash Increase in customer complaints “I Have a Bad Feeling About This” Warning Signs of Bankruptcy Lax financial management Directors can’t explain major transactions Deep discounts to customers to get money C