Bankruptcy of Excavators

The bankruptcy of excavators does not differ significantly from other business bankruptcies except for the heavy equipment that excavators inevitable own or rent.

If the bankruptcy is a reorganization, the key to success is a renegotiation of the values of the equipment or a Chapter 11 that reduces the amount of the secured claims of the lender down to the actual value of the equipment.

If the bankruptcy is a Chapter 7, the important issue will be the orderly disposition of the collateral. Because of its value, the debtor must take significant caution to make certain that the collateral is returned unharmed to the lenders. Here, as in other bankruptcies that deal with surrendered collateral, dealing fairly with the creditors is not only the right thing to do, but also the prudent thing. Because, you see, if they are treated fairly, they will not contest the bankruptcy of the the owner or guarantor if he has to file individually.

Charles Chesnutt