For businesses struggling financially, bankruptcy can sometimes seem like a last resort. However, while this is a tough time, it can also be one where you convert valuable assets into liquidity you desperately need. The sale of commercial property, particularly if done properly during bankruptcy, can provide a unique opportunity for businesses to resolve debts and relieve some financial burdens. And this is where a bankruptcy real estate specialist in Newhall may prove to be immensely beneficial.
Navigating the bankruptcy process can be complex, but selling off assets, including real estate, may be an effective strategy. The right approach can turn that daunting process into a smooth transaction that makes sense for all parties involved. Under the auspices of the court, however, selling real property can be beneficial to businesses in moving forward, be it trying to pay creditors or maximizing the sale proceeds.
Why Selling Commercial Property in Bankruptcy is a Smart Move
The focus of a business’s finances becomes the repayment of the debt owed at the time of bankruptcy. And it also includes satisfying claims from both the secured and the unsecured creditors. As one of the more valuable assets, commercial real estate can provide cash flow.
Liquidating real estate through selling property enables you to realize some or all of that value and turn it into cash. You may then leverage it to offset debts, pay operating expenses, and more. Now you know why you need to collaborate with a bankruptcy real estate specialist in Newhall!
Rather than have their property lost to foreclosure, commercial enterprises can maintain some degree of control over its sale.
The bankruptcy court supervises the sale. It ensures a certain level of transparency and protection for both the buyer and the seller.
The bankruptcy trustee, along with the court, oversees the process to ensure that the sale is executed efficiently. And it proceeds faster than a traditional real estate transaction.
Selling under court supervision also helps ensure that the business is trading the property for a fair value. It allows such financial entities to better satisfy creditor priorities.
How To Liquidate Your Commercial Property in Bankruptcy?
Whether you plan to bring on board a bankruptcy real estate specialist in Newhall or not, the process of selling commercial property in bankruptcy essentially remains a series of steps to validate that the sale is legal and a benefit for all parties.
When a business files for bankruptcy under Chapter 7 or Chapter 11, all of the debtor’s property—including real property—becomes a part of the bankruptcy estate.
The business will need to file for bankruptcy through a bankruptcy lawyer. It will ensure that the bankruptcy court has duly processed and approved the bankruptcy filing.
A bankruptcy trustee oversees the sale of assets. This trustee has the job of making sure that one purchases the asset in question at fair value and that creditors have received the proceeds of the sale.
The trustee will also decide what assets may comprise the bankruptcy estate and what to exempt from the very same. This effectively ensures not only a fair sale price but also equitable treatment for all creditors.
The sale cannot be final, and the buyer cannot obtain ownership until approved by a court.
Potential buyers of the property may include investors or strategically minded companies. This is where we at Above and Beyond Real Estate may turn out to be of immense assistance.
Those offers are submitted, and in general, the highest bid is chosen, though secured creditors may have a say in the final decision.
The seller receives a post-sale payment amount, which the secured as well as the unsecured creditors are going to get according to the terms of the bankruptcy.
then gets distributed to secured and unsecured creditors based on the terms established by the bankruptcy.
This ensures that both the debtor and the creditors have received compensation according to the value of their assets.
You may call our bankruptcy real estate specialist in Newhall to schedule a consultation!