Choosing a Bankruptcy Lawyer - Short Artwork

Corporate Bankruptcy A to Z

The corporate bankruptcy process is explained by seasoned bankruptcy attorneys, consultants, judges and companies who have filed for bankruptcy. It begins with what is bankruptcy, to who should file, how to find the best attorney, what forms to file, what happens to the company after the filing, the plan to exit and how it all works.

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Corporate Bankruptcy A to Z

Choosing a Bankruptcy Lawyer - Short

May 22, 2026 • Neil Goldstein

0:00 | 12:11

Topics

Best state to file in
How to choose the correct law firm
Bankruptcy expectations answered
Where money comes from to pay fees
Handling litigation out-of-court

Guest: Kim Lynch — Forman Law

This is an abridged version of the original episode. Feel free to go back and listen to the full version in our show feed.

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SPEAKER_01 0:01

You are listening to Corporate Bankruptcy A to Z, a podcast that gives you the ins and outs of corporate bankruptcy. This is an abbreviated release of episode 6, where we will cover how to choose the right bankruptcy attorney, what questions to ask during the selection process, how courts influence outcomes, and what to expect during the early stages of filing. If you are new to the show or want to hear the full conversation about this topic and more, we invite you to check out our full bankruptcy series found below in the show feed. There you will find an unedited version of each episode where we dig deeper and answer more questions. Corporate Bankruptcy A-Z is hosted by Neil Goldstein, a chief restructuring officer with over 30 years experience. He's joined by co-host and legal expert Steve Raven of Saul Ewing, a bankruptcy attorney with over 40 years in the field. If you are dealing with a situation now and need guidance, you can reach out to them directly. Call Neil at 940-808-9451 and Steve at 973-286-6713.

SPEAKER_02 1:12

For this episode, we have a special guest, Kim Lynch of Bormann Holt. Are the bankruptcy laws and rules the same in every state?

SPEAKER_00 1:22

The bankruptcy laws are the same in every state. The bankruptcy laws are codified in what we all call the bankruptcy code, and it's basically our Bible.

SPEAKER_02 1:31

Yet there are preferences to filing in a state because of the interpretation of the rules?

SPEAKER_00 1:37

Not so much the interpretation of the rules. It's basically what a judge is willing to do. So bankruptcy is a court of equity. You've got your bankruptcy code that has uh prescribes what you can do and what you can't do. The bankruptcy rules tell you how you're going to achieve those results. So, for instance, you want to object to a claim, the bankruptcy code tells you, this code section tells you you have to object to a claim. The bankruptcy rules tell you how you have to serve it, the time frames within which you have to serve. So they complement each other. A good example is in the Third Circuit. Let's say someone wants to sell something, you know, bankruptcy, they want to have a bankruptcy sale. So what they do is they file a motion, and in that motion they say, you have a stalking horse, and that stalking horse spends a lot of time putting together a package. So let's say you have a car industry, since you talked about Chrysler before. So Chrysler wants to sell a whole bunch of cars. So they get somebody to come in as a stalking horse, and that stalking horse makes a bid, but spends a ton of time and energy putting together that bid. A lot of money, a lot of resources. When you make the bid, you say to them, look, I want to get reimbursed for my expenses, but I also want to get a kicker because I'm the stalking horse. I want you to give me some more money. So it's not in the bankruptcy code that you're allowed to get reimbursed, but it's something that the court will authorize.

SPEAKER_02 3:14

When interviewing law firms, what questions should the company ask to best match the firm with the company's needs?

SPEAKER_00 3:24

You need to find somebody that has experience in your type of business. You want to make sure that your law firm understands your business. You have to know whether or not they're well respected by the court. And it's important to have an understanding if they're well respected by their peers because you want the judge to act favorably upon you as to what you want to do, and you want the attorneys that you're dealing with to have respect for you and understand that you're a team player, that what you say can be trusted, and that's important also.

SPEAKER_03 4:03

You might want your lawyer to be able to make a deal quickly, as opposed to just litigate, which things have to happen quickly because there's so much on the line every day. So you want to get issues resolved quickly and amicably as opposed to just litigating everything that comes down the pipe.

SPEAKER_02 4:28

In previous episodes, our guests had difficulty answering some questions about the bankruptcy process, stating each case seems to be different. The client will ask, I interviewed this law firm and they couldn't tell me how it's going to go, the bankruptcy. They said, Well, each case is different, and you know, or your case might be this and might be that. So the question in this episode is with that type of response from a law firm in the interview, how does a client know how to process that?

SPEAKER_00 5:05

I think the client has to ask a few more questions. What problems do you see? What's the best case scenario? What's the worst case scenario? In my type of business, what problems have you seen come up? They have to delve a little bit further and ask more questions in order to get the answer that they want. If they ask more questions and though they don't get answers to those questions, I think you need to look for another law firm.

SPEAKER_02 5:35

Do all lawyers charge the same to file a bankruptcy petition? Would a sole practitioner be at a disadvantage over a firm with many partners and staff?

SPEAKER_00 5:47

Again, it's the facts of the case, it's the issues of the case that will determine what you should pay, where you should go.

SPEAKER_02 5:54

What are the different components of a bankruptcy that cause the process to be so expensive?

SPEAKER_00 6:01

You're going to put together a list of creditors, you're going to prepare the petition, hopefully deal with uh your secured lenders after you file is when things hit the fan. Immediately after you file, you're going to have uh probably going to have a court hearing. In big cases, you're going to have to file a motion with the bankruptcy court asking for all sorts of relief. You don't want the electric company to turn off your electric. You want to be able to pay your employees. You want to be able to continue using your bank statements, your bank account. So there's a whole number, a large number of things that have to be done, and they're called first aid motions. And they're complicated. Everything is done on shortened time, everybody scrambles around, and you're probably in court within one or two days of the filing of the petition. So you're you're doing that work, but you're going to have everybody opposing you, or a lot of people opposing you. You have to respond to that.

SPEAKER_02 6:55

My clients usually ask, with my company in trouble, how can we afford to do this?

SPEAKER_00 7:02

And my answer to that is how can you afford not to, in most cases? Basically, what happens, the the companies will stop paying some of their vendors and they'll put aside money to pay their attorneys.

SPEAKER_03 7:16

In answer to the question, how can I afford this? From the day of the bankruptcy forward, there all of their debt is frozen. So if they were paying $10,000, $20,000, $30,000 a week, for example, on debt, that's going to stop immediately. So the piggy bank is building up.

SPEAKER_02 7:38

Steve and I have done quite a few restructurings in the past, and statistics show that about three to five percent of the creditors do not go along with the company's offer. What could be done in those cases?

SPEAKER_00 7:53

I think you can do a couple of things in those cases. You may have to go back with a different deal for them. I think it depends on how important that vendor is if you want to stay in business. You may have to pay them in full. But short of making another deal, maybe threatening that lock. We've got 97% are on board. You're not on board. We're going to go into a bankruptcy. If we go into a bankruptcy, you're going to get a heck of a lot less than what I'm offering you. If we don't go in bankruptcy, we can continue to do business together. So bankruptcy can be a significant threat to a vendor or to a creditor.

SPEAKER_02 8:33

Turning to the litigation part, a company may need a restructuring because of existing lawsuits. What is the best way for a company to handle those?

SPEAKER_00 8:45

If there are existing lawsuits and you file bankruptcy, those lawsuits go away.

SPEAKER_02 8:50

But in a restructuring that's out of court. So now we're dealing with a company that's trying to avoid bankruptcy. The debtor can deal with his vendors and creditors, and most will go along with an out-of-court restructuring. But if they're trying to make it out of bankruptcy, what would you suggest they do with the existing lawsuits?

SPEAKER_00 9:12

I think you basically treat them the way you would treat any other creditor, but maybe enhance the settlement a little bit more because they've had to hire a lawyer and they've had to pay a lawyer.

SPEAKER_02 9:24

What we've discussed in previous episodes is not only that a lawsuit might be forthcoming, but when the creditor hears that the company is in trouble, they cut back on the credit line that they offer and the terms maybe that they offer. If they were giving 45 days to pay, maybe they give 15. So there are a lot of issues when a creditor is informed about a problem with the company.

SPEAKER_00 9:54

I think in that point, when you're not paying your bills as they become due, your creditors may already have taken that step. So I'm not certain how much of a problem that's going to be for your company. I think a lot of companies, a lot of your vendors may appreciate the fact that you're being forthright with them. Look, I'm having some problems. Can you stretch it out a little bit? Here's what I can do.

SPEAKER_01 10:16

Do you have a question about bankruptcy? Why not ask the experts? Emails for Neil and Steve can be found in the show notes below. And remember, the first call is always free. Call Neil at 940-808-9451 and Steve at 973-286-6713. You can also find more resources on our websites. Go to corporatebankcy a to z dot com or elementary business.com. You can also find links to those in the show notes down below. Corporate Bankruptcy A to Z podcast and YouTube channel are produced by me, Sir Isaac Smith. Be sure you subscribe and share the episode, and we will see you next time.