My boss has recently told me that he has to declare bankruptcy due to a massive client who never paid. He is offering me partner status in the next company and I could really use some outside advice. I’m 20, in college, and planned on going into sales. My business on the side hasn’t had any traction for a while due to my lack of connections, but my boss has consistently had work for my company since his network is huge. He’s s offering ownership in a new company which will have the services I offer, with his connections, as well as all of his contracts from the previous company, which is well into six-figures. I’d be bringing skills and labor to the table. He’d be bringing that, plus connections and current contracts/relationships.

Where do I start? This seems like a great opportunity but throws a wrench in my other plans. Any outside opinions, and questions are welcomed! I’ve never faced something like this and have no clue where to start.

  • Human_Ad_7045@alien.topBEnglish
    1·
    1 year ago

    I agree that you must consult with an business attorney who has bankruptcy experience.

    However, First, you need more information.

    1. What is the owner’s plans regarding startup of a new company?

    2a. What is the necessity of cause of going bankruptcy?

    • For example: his large receivable would not a cause.
    • His inability to pay rent could be a cause
    • His inability to pay vendors/suppliers could be a cause
    • His inability to make loan or lease payments to creditors could be a cause.

    2b. Is his plan to bankrupt the company or liquidate the company and/or to file personal bankruptcy? {This is not an unusual situation if the owner’s business has a loan that he has personally guaranteed. In the case, the client who hasn’t paid, could impact your boss’s company’s ability to make his monthly loan payments. }

    1. How long after the owner files does he plan to start up his new company? (The bankruptcy process should take 90-120 days if there are no slowdowns in the process.)

    2. What % of ownership does he plan to give you?

    3. How much do you have to invest into the company?

    4. What role, if any, will you have in the new company?

    It’s difficult to go beyond this without knowing anything about the company.

    For example, If the company has physical assets that it owns such as; a building, vehicle, equipment, the Bankruptcy Trustee will order the assets liquidated with the proceeds going to creditors.

    If you can get answers to the above questions which you can intern provide to an attorney, the attorney will be in a better position to advise you.

    Best of luck.