Many courts of law are used in the United States and around the world today, and they can serve a wide variety of functions. Court is used for more than divorce cases or family court, or criminal prosecution. Other courts will be used for maritime litigation cases, and a bankruptcy court will be used when bankruptcy filings have been done by a debtor company. In such specialized cases such as maritime litigation or bankruptcy law, the correct sorts of lawyers will be hired to represent and guide their clients in a court of law, and the outcomes may vary widely. What is there to know about maritime litigation today, or when a company files for bankruptcy?
Maritime Litigation
Put simply, maritime litigation involves laws pertaining to an ocean-bound ship and its property, crew, passengers, and cargo. Such maritime litigation may be based on the nationality of the vessel or the port where it is docked, and maritime litigation may cover a number of mishaps that may take place on the ship. If cargo is lost or damaged during a naval journey, for example, the recipient of that cargo may demand compensation for anything that was lost or damaged during transit. The client may turn to a maritime litigation law firm and find lawyers who specialize in cases such as these, and use maritime litigation to reach a private settlement with the ship’s crew and owners before needing to take the case to court. In other cases, the seamen on board the ship may become injured on board the ship and require medical compensation from their employers, or passengers may be injured as well. In fact, maritime litigation may be used when a ship recovers valuable cargo or other items from a wreck, and lawyers will be hired by various parties to negotiate who will own which items from the salvage.
Bankruptcy and Law
Meanwhile, wealthier individuals and smaller companies often declare bankruptcy every year in the United States, but bankruptcy is not necessarily the hopeless financial case some people imagine it to be. Declaring bankruptcy allows the debtor to pursue debt relief in a court of law, and they and the creditors and court will work together to find a productive solution for everyone involved. Small companies, in particular, may file for what is called chapter 11 bankruptcy. These companies tend to have fewer than 50 employees and under $10 million in yearly revenue or under $10 million in assets and liabilities.
Such a company may go bankrupt if it is the victim of white-collar crime such as embezzlement or stock broker fraud, when investors are fooled with distorted or false data into making poor investments. In other cases, a bankrupt company was the victim of a cyber criminal who broke into their mainframe and stole money, passwords, bank information, and more. Such crimes can harm a larger company and drive a smaller one into total bankruptcy, so this company may go to court to find debt relief. Hiring attorneys from a nearby bankruptcy court may help them keep the court fair and explore more options during this proceeding.
During bankruptcy court, the debtor may be considered DIP, or “debtor in possession.” This means that the debtor remains open for business and retains ownership of its assets, but with conditions involved. The debtor may not (without permission) take on new loans, buy or sell property outside of its normal business operations, or hire lawyers. Violating these terms or committing crimes may result in DIP status being revoked.
During court, the debtor may undergo an audit so that everyone may determine the company’s total finances and assets and value, and the debtor will also be asked to form and later present a reorganization plan. Such a plan will restructure or downsize the debtor company to make debt repayment easier, and the debtor company may consult its lawyers during this time, too. The plan will be presented, and if accepted, set into motion. The debtor may be partially or totally downsized or liquidated to make debt repayment easier, and in some cases, only a fraction of the debt can be paid even if the debtor is completely liquidated. Should this be the case, the creditors will have to make due with the repayments that they receive.
