Commercial disputes are nothing new in the world of business and law. Partnerships can turn sour over disagreements over finances or resource management, and debtors may owe more than they can pay to their creditors. And that is just among business individuals and groups; when cyber-crime such as computer intrusions enter the scene, some companies and individuals may find themselves in bankruptcy court. The good news is that civil rights are well-managed by bankruptcy law and attorneys, so commercial disputes can be settled and any case could potentially be resolved.
Climbing out of Debt
In today’s world of borrowing, speculation, and loans, private and corporate debt alike is always a reality, and sometimes, it can get out of control. On example of this is chapter 11 bankruptcy, where according to NOLO, a company claims that it cannot pay its existing debts to its creditors, and acknowledges that it needs others to bail it out. In about 90% of cases, in fact, chapter 11 debtors have under $10 million worth of assets and liabilities, under $10 million in annual revenue, and under 50 employees. But even bigger companies, from K-Mart to General Motors, have filed as well. Commercial disputes like these can be made more complicated when shareholders grow concerned about the company’s well-being and therefore, their own income from their shareholder status. Generally, a company or individual will file chapter 11 bankruptcy at will, although sometimes, creditors or shareholders will force the issue.
Generally, as these sort of commercial disputes are underway, the debtor retains control of its assets and may continue business as usual, with no trustee appointed. However, if the court sees proper need, a trustee will be appointed, usually if the debtor demonstrated fraud, dishonesty, or gross incompetence during business. Bankruptcy filing continues as the chapter 11 debtor proposes reorganization plans, and if they act on good faith, this period of exclusivity will be extended by the bankruptcy court based on when the case began. If the debtor does not present an accepted plan, competing plans from creditors and shareholders will be considered.
Once a plan is accepted (during a confirmation), debtors will pay at least a fraction of what they owe under the new plan, but sometimes, the case will become a chapter 7 liquidation instead. Success may be based on the plan’s contents and the debtor’s finances.
A struggling business’s hardships may be compounded when not only do relations with a business partner or creditor go bad, but when crime enters the picture. Online hackers have proven capable of stealing from even the biggest companies, and mid-range companies might also be targeted. Businesses often invest in good cyber-security, but if they do not, or if a highly skilled and advanced hacker strikes, disaster can ensue. According to Bit Defender, even major corporations such as Sony and Citigroup have lost money to hackers in the early to mid 2010s. Sony, for example, was hit hard by a security breach in 2011, and over 77 million user accounts were compromised in what is one of the biggest video game security breaches of all time. Citigroup was hacked in June 2011, and information from over 200,000 clients was stolen. It is clear that when such a devastating attack strikes online, commercial disputes are bound to occur when a hacked company has difficulty paying debts, especially if the company was already struggling. Good cyber-security is available for private individuals and corporations alike, and can prevent theft like this from occurring.