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Tuesday, March 19, 2024

Business Bulletin from Brooks, Tarulis & Tibble: Business Reorganization Versus Liquidation

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When confronted with overwhelming financial difficulties, business owners often consider whether it is better to reorganize or liquidate their business. In making that decision, owners have many factors to consider including:

  • Nature of the Economy. Is there a place for your business in the current or future economy?
  • Nature of the Business. Is there still a market for the business’ products and services, and does it still have profitable employees and customers?
  • Assets. What assets does your business have and how can they be utilized or their value maximized?
  • Liabilities. What liabilities can be shed or reduced, if any, to enable the business to be saved?
  • Personal Liabilities. How will either choice affect the personal assets of owners?
  • Future Prospects. How will the liquidation or reorganization affect future employment or opportunities of owners, employees and other stakeholders?
  • Maximizing Return. Which choice will enable the business and owners to recover or maximize any return on their investment in the business?
  • Going Concern. Is there a going concern value and how can it be actualized or maximized?
  • Taxes. What are the tax consequences to the business and owners of either choice?
  • Collateral Harm. What harm will either choice cause third parties and stakeholders, and what can be done to mitigate any harm?
  • Continuing Obligations. What obligations will remain after a liquidation or reorganization?
  • Alternatives. What are the alternatives to either choice or to taking no action at all?

As the stakes are high, either decision should not be made without full consideration and counsel. The attorneys at Brooks, Tarulis & Tibble, LLC can advise business owners on the decision whether to liquidate or reorganize a business, and how to best achieve either. Should you have any questions or issues contact Brooks, Tarulis & Tibble, LLC. by visiting www.napervillelaw.com/contact-us or email Info@NapervilleLaw.com.

This Brief is designed to provide our friends and clients with information regarding the various subject matters covered, it is not designed to take place of legal, accounting or other professional advice. If expert assistance is required, the services of a competent professional should be sought. This memorandum may constitute advertising under the rules regulating Illinois attorneys.

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Brooks, Tarulis & Tibble
Brooks, Tarulis & Tibblehttps://www.napervillelaw.com/
Brooks, Tarulis & Tibble, is a general practice law firm, providing legal services in corporate law, commercial transactions, real estate, contracts, estate planning, business litigation, local government representation, divorce, privacy protection, personal injury litigation, and a wide range of other legal areas.

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