Throughout Los Angeles and Pasadena, there are many companies that specialize in technology products. When a technology company begins to face financial trouble, a chapter 11 bankruptcy may be the company’s best option. A chapter 11 can allow for the company to restructure debt, cut operating costs, renegotiate contracts and otherwise alter the way operating capital is used. By filing for chapter 11, the technology company can become a more profitable business entity that generates positive cash flow.
However, the ability of a tech company to come successfully through chapter 11, rather than to end up having to convert to a chapter 7 and liquidate its assets, will depend upon the quality of the legal advice the company receives during the bankruptcy filing.
A tech company needs a Los Angeles tech bankruptcy lawyer with experience in chapter 11 for technology businesses. At DCDM Law Group, we have this experience. We can put our legal and business knowledge to work for debtors to help them to deal with the complexities associated with a tech-company restructuring.
Challenges in a Bankruptcy Filing
One of the most significant issues that may arise when a tech company is the debtor in a chapter 11 bankruptcy is the issue of patents. Most technology businesses have a patent protecting their intellectual property. However, often in the time leading up to a bankruptcy filing, companies will not properly maintain patents due to their financial struggles. When a company fails to meet deadlines or keep up with patent applications or prosecutions, it is ignoring valuable assets.
During a chapter 11 filing, therefore, an estate is generally created for all patents and patent applications. Legal counsel hired by the debtor or by the trustee may then be placed in charge of protecting the value of the patents and maximizing the potential value of these important assets. This may involve filing a power of attorney giving legal counsel the authority to prosecute patent applications with the United States Patent and Trademark Office. It may also involve identifying deadlines for domestic and foreign patents and ensuring maintenance fees are paid in full to keep patents active.
In addition to the unique issues presented as a result of the tendency of technology companies to own intellectual property, tech companies also face many business issues that are common to any entity filing chapter 11s From determining whether executory contracts should be assumed or rejected to making decisions on whether assets should be sold under the rules in section 363 of the bankruptcy code, the process of successfully completing a chapter 11 is complex.
At DCDM Law Group, our experienced Los Angeles and Pasadena tech bankruptcy attorneys have the specialized knowledge of technology bankruptcies necessary to help ensure that the chapter 11 restructuring is a success so your business can emerge with a positive financial outlook for the future.