The Problem of Pass-Through Tax Liability from Liquidation of a Family Business — A Chapter 11 Solution?

By: Donald L. Swanson Hypothetical: A family business has been successful for many years. But obsolescence of its products and services is taking a toll: the business is now insolvent, its assets are fully encumbered, no one is interested in buying the business as a going concern, and family shareholders have guaranteed most of its debts.... Continue Reading →

Resisting Fraudulent Transfer Temptations — Family Businesses

By: Donald L. Swanson About a decade ago, I have an appointment scheduled in my office with two brothers. I’m excited, because they are the principals of a major family business in our region. I’m aware that their business is facing economic headwinds and am assuming they want my counsel on managing their business difficulties. Our... Continue Reading →

A Strategy to Beat the Absolute Priority Rule in Family Business Bankruptcies

By: Donald L. Swanson The absolute priority rule is the greatest legal impediment to reorganizing a family business under Chapter 11—no other legal impediment is even close. In what follows, I offer a strategy for beating that rule. The Absolute Priority Rule The absolute priority rule is a Chapter 11 plan confirmation requirement. It says:... Continue Reading →

Representing Family Businesses in Financial Stress

By: Donald L. Swanson I’ve been practicing law since 1980. A major portion of my practice, throughout those decades, has been in bankruptcy and related areas of law. And I’ve represented all sides: debtors, creditors, trustees, committees, etc. During that time, I’ve counseled hundreds of family businesses and their owners—helping each walk through a period of... Continue Reading →

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