From my work with Canadian exporters, I’ve been seeing an unprecedented number of their U.S. customers turning to “Chapter 11” bankruptcy protection in the still-battered U.S. market. While many Canadians have become familiar with the term “Chapter 11,” they don’t necessarily understand what it can mean to their business.

To put it bluntly, you may be losing more than you have to when faced with a customer in a Chapter 11 bankruptcy. So I’d like to give you some tips on how you can increase your chances of recovering as much as possible.

Let’s say your customer is XYZ based in Massachusetts and it has just filed for “Chapter 11” protection. This action temporarily stops virtually all creditors from pursuing what’s owed to them. Once XYZ is accepted under bankruptcy protection, the court determines the order of payments, as follows:

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