NOTE: I do not generally practice bankruptcy law, and, as stated elsewhere on this blog, the below does not constitute legal advice or create an attorney-client relationship. Consult with your attorney to address your specific legal needs.
The news recently broke that Aftershock Comics filed for chapter 11 bankruptcy. Contrary to the opinion of many, this does not mean that Aftershock Comics will be immediately going out of business. Chapter 11 bankruptcy is primarily used by businesses to hold off creditors, reorganize their debt, and continue operating. That is the intent, anyways. If it is unsuccessful, then the company may end up selling off its assets to pay back creditors or otherwise be dissolved.
Unfortunately, the bankruptcy process can take some time to complete. Those who are owed, or likely to be owed, money (the creditors) should be receiving official documents regarding the bankruptcy and relevant deadlines. Once received, creditors should review them carefully.
In addition to being lengthy, the bankruptcy process can also be incredibly frustrating. There are going to be things that will seem unfair and anger many. For instance, now that Aftershock has filed for bankruptcy, they cannot assign property in exchange for waiving debt without the court’s permission, and creditors cannot knowingly harass the company for payment. Some people who have recently received payments may be asked to return them. There is also the possibility that some people may be required to continue working with the company even though they haven’t been paid. Finally, even though someone might be owed money, there is still a strong chance that they will (i) receive less than what they are owed or (ii) receive nothing at all.
There are likely to be a lot of twists and turns to this, and every creditor will have to decide how involved they want to be. Some questions to ask are:
1) Do you want to just follow along with the process and see what happens?
2) If eligible, do you want to be actively involved and try to influence and shape the reorganization process?
3) How much time and money do you want to spend on this? Is it worth it versus what is owed?
While we wait for more information, if you think you are owed money, make sure you are listed as a creditor. If you are listed, then verify that the listed information is accurate. If you are not listed, then you will need to file a claim before the relevant deadlines. Now is also a good time to review your contract and gather all relevant information and evidence regarding any claims you may have against Aftershock. Finally, it may make sense to consult with an attorney to evaluate your options.