Filing for Commercial Bankruptcy in Colorado
You can’t control the economy
on July 30, 2018
Updated on February 8, 2021
All it takes is one bad deal, one unhappy client, or one bad contract, and your business could go under. Though it’s not always the business’ fault, when it happens, it’s time to seek help.
Often, in the worst of times, it is hard to see the next move, or to know when to ask for help. But business owners should reach out to an attorney if they see a significant decrease in revenue, are unable to pay taxing authorities, or have defaulted on significant debt.
For the moment, however, commercial bankruptcy filings are down. “Bankruptcy is counter-cyclical,” says real estate attorney Aaron Conrardy. “In Colorado, the market is really good, and so bankruptcies are way down. It’s been a really strong bull economy for over seven years—it’s only a matter of time before the market corrects itself. … When the economy is bad, we are extraordinarily busy.”
Filings aren’t simply just connected to whether the economy is good or bad, however. Conrardy notes that, even in a strong economy, there will always be sectors that are down. “For instance, a couple of years ago, oil and gas prices dropped, and the companies involved in fracking were no longer profitable,” he says. “We have this great economy, but in the oil and gas sector, we see a lot of filings.”
There are other instances where a company may have to file, of course. For instance, when a small company loses its biggest client. Or, says Conrardy, “A couple of years ago, gold prices dropped, and we saw mining companies filing for bankruptcy.”
Economies are highly complicated organisms, and impossible to control. Even if you see the writing on the wall, however, there are steps you can take. “Do everything you can to maintain normal business practices,” says Conrardy. “If an account has historically been paying their invoices every 30 days, and then starts paying late, get on the phone and get them back on that 30-day schedule. If they do file for bankruptcy, any payments made outside of that normal course of business could be clawed back as preferences.”
He continues: “If a business owner sees the writing on the wall … it is a good time to contact a reputable and experienced bankruptcy attorney, to mitigate any downside possible”
For more information on this area of law, see our bankruptcy overview.