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  1. #1
    Join Date
    Sep 2016
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    Default What to Do if a Business That is Both Your Debtor and Creditor Goes Bankrupt

    A company was engaged in an ongoing business relationship with another company. That second company has filed for bankruptcy protection. The first company owes the bankrupt company $10,000, but is owed $20,000 by the bankrupt company. The bankruptcy trustee is demanding payment of the $10,000, but it is unlikely that the first company will ever get money from the bankrupt company to pay its larger debt. What should the first company do?

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: What to Do if a Business That is Both Your Debtor and Creditor Goes Bankrupt

    The first company should assert an offset claim against the bankrupt company, through the bankruptcy court. The business should have its lawyer assert the offset and negotiate a settlement with the bankruptcy trustee.

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