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wbjournal.com | February 4, 2019 | Worcester Business Journal 17 10 T H I NG S We know about... Business learned from selling Girl Scout cookies K N O W H O W Someone who owes you money files for bankruptcy. Now what? 10 1: C U T C O S T S Y ou have just learned that your counterparty has filed for bankruptcy. Be aware that deadlines in bankruptcy move quickly, and cred- itors who sit on their rights may lose them. So what do you need to do and how quickly do you need to act? Just as importantly, what actions are you now prohibited from taking? U.S. Bankruptcy Code prohibits creditors from exercising certain rights aer a bankruptcy case is filed. How should creditors navigate this new landscape? ese questions apply to a variety of commercial relationships, including banks extending financing to delinquent borrowers, manufacturers selling and delivering goods on credit, and landlords whose tenants seek bank- ruptcy protection. When your counterparty files for bankruptcy the normal rules of com- merce change. e bankruptcy pro- cess invariably delays and sometimes prevents creditors from exercising their bargained-for contractual rights. Con- tractual provisions enforceable outside of bankruptcy are sometimes unenforce- able inside of bankruptcy. To navigate this process, creditors first need to understand the broad scope of the automatic stay imposed under the bankruptcy code upon the commence- ment of a bankruptcy case. As the term implies, the stay is automatic (effective immediately upon filing without further order of the court) and prevents creditors from, among other things, commencing or continuing any action to collect a debt. A creditor with notice of its counterpar- ty's bankruptcy filing taking any action to collect its debt (e.g. by sending dunning letters, making phone calls, or filing court documents), may be deemed to have knowingly violated the automatic stay and be subject to sanctions. Upon the filing of a bankruptcy peti- tion by your counterparty, you should assemble and review all documents relevant to the relationship. If you are a bank that extended credit to a delinquent borrower, you need to review your loan documents, confirm your mortgag- es and other security documents and instruments are properly signed, valid, enforceable and perfected; educate your- self on the bankruptcy issues unique to your counterparty, and determine whether you can obtain an order from the bankruptcy court granting you relief from the automatic stay to exercise rights and remedies. A customer's bankruptcy filing oen causes banks to engage separate bankruptcy counsel to more effectively navigate the bankruptcy process and to identify deficiencies in its loan documents. If your company sold and delivered goods on credit to a counterparty filing for bankruptcy, you need to identify the relevant contractual documents (pur- chase orders, invoices, copies of checks, and other contractual documents) and comply with critical deadlines, including deadlines to reclaim goods, to file an administrative expense claim for goods sold and delivered within 20 days of the counterparty's bankruptcy filing, and to file a proof of claim in the bankruptcy case. If you are a landlord and your tenant files for bankruptcy, you need to monitor the case closely, identify any motions to assume or reject leases, respond timely to such motions, confirm whether proposed cure amounts are accurate, and assess whether a proposed assignee can offer adequate assurance of future performance within the meaning of the bankruptcy code. You should promptly confer with an experienced bankruptcy lawyer when your counterparty files for bankruptcy. An attorney will assess your individ- ual situation, advise you on your legal rights, assure compliance with applicable deadlines, and develop a comprehensive strategy to maximize recovery. BY MARK W. POWERS Special to the Worcester Business Journal BY SUSAN SHALHOUB Special to the Worcester Business Journal C utting back on costs can equal real money in the coffers and contribute to a more-positive bottom line. It's easy to get caught up in making more sales, forgetting to revisit costs as a way to better position your company. Here are some areas to consider. Vendors. Make a list of partners or associates you could ask to share the ex- pense of certain products so you could qualify for a quantity discount, suggests Joseph Benoit at Entrepreneur.com. He says to contact suppliers and try and negotiate a discount. Insurance. "Insurance coverage and rates tend to change from year to year, dependent upon industry trends and market performance," Joe Jonas, director of wholesale and consulting at Insureon, told BusinessNewsDaily. com. He recommends business owners re-evaluate their insurance packages regularly to ensure they are getting the best protection at fair market value, instead of allowing their insurance to automatically renew without review. Legal fees. Corporate litigation, patent work and reorganizations call for legal specialists. However, write Michael Evans and Peter Duff at Forbes, it doesn't mean that specialist – who is likely to charge high hourly rates – is the best choice for corporate counsel work. "Legal fees are negotiable and many firms will fix the fee for basic corporate work or accept a fixed monthly retainer for basic legal services," they write. Mark W. Powers is a partner at Worcester law firm Bowditch & Dewey. Reach him at mpowers@bowditch.com. W W 10) Present yourself and your product in the best light. Potential customers need to see your good intentions reflected in your presentation. Yes, you need to know your product, but you need to know how to showcase it. Your attitude and your advertising should reflect your goals. 9) Always consider the customer experience. Remember the times you didn't receive good customer service or you were treated poorly? Don't be that person! 8) Master the art of the re-direct. Don't resign yourself to the first 'No.' For example: Customer, "I'm on a diet!" Cookie seller, "You can donate your Thin Mints to our local military personnel!" 7) Handle rejection with grace. Some people just aren't buying what you're selling. Accept it and move on. It's not personal! 6) Have a plan. From setting up your location to managing inventory, keep your bottom line in mind. What is your overarching goal? How much time do you have to achieve it? Then break it down in manageable parts. 5) Dress for success. In our line of work that means weather-tech clothes to protect from the elements and wearing hand-warmers inside your gloves on top of your hand so you can still work your fingers. Invest in what helps you do your best and look like you mean it. 4) Understand your selling environment. Especially for business owners with multiple locations, what works in one city may not resonate with your rural community. It's imperative you know the environment. 3) Capitalize on your success and use your team. Everyone has their strengths. Evaluate the skillset of your team and assign positions accordingly. When you've hit on a great idea or successful location, do more of that. 2) Persevere and don't burn out. Not every day is going to be a banner sale day. When you experience a challenging time, recall your overarching goal and commit yourself to moving forward. 1) Look for the occasion or holiday pairing your business or product with a customer's needs. Girl Scout cookies for Valentine's Day, anyone? The Girl Scouts of Central & Western Massachusetts' Girl Leadership Board is comprised of 21 girl scouts, ranging from 5th grade to high school seniors. The 14 leaders who wrote this column are Desiree, Felicia, Ana, Ella, Emily, Jasmine, Rose, Gwen, Makenna, Mary, Morgan, Samantha, Alana and Addison. Visit www.gscwm.org. W