Perspectives

When a customer files for Chapter 11 bankruptcy, it doesn’t mean they’re going out of business—it means they’re restructuring. Unlike Chapter 7, which liquidates assets to pay creditors, Chapter 11 allows a business to reorganize its debts and continue operations. However, as a creditor, you must take proactive steps to protect your company’s interests and maximize recovery. Here’s your to-do list:

1. Confirm the Filing

Verify the bankruptcy case number, court jurisdiction, and whether it’s a traditional Chapter 11 or a Subchapter V filing (a streamlined process for small businesses). Knowing the type of case will help you anticipate the timeline and procedures.

2. Comply with the Automatic Stay

As with Chapter 7, an automatic stay goes into effect the moment a debtor files for bankruptcy. This legally halts all collection efforts—including calls, emails, lawsuits, and lien enforcement. Violating the automatic stay can result in penalties, so it’s crucial to pause collection activities and reassess your legal options.

3. Obtain the Petition and Mailing Matrix

The bankruptcy petition and mailing matrix list all creditors and their debts. Carefully review these documents to:

• Ensure your company is listed as a creditor.
• Confirm the debt amount and terms are correctly reported.
• Verify your mailing address is accurate so you receive critical notices about the case.

If your debt is missing or incorrect, you may need to take immediate action to assert your rights.

4. File a Proof of Claim

Even though Chapter 11 is a reorganization rather than a liquidation, creditors must still file a proof of claim to preserve their right to repayment. This document outlines how much the debtor owes you and why your claim should be considered valid in the reorganization process. Failing to file on time could mean losing out on potential recovery.

5. Review the Debtor’s First-Day Motions

In Chapter 11 cases, debtors often file first-day motions—requests for court approval of immediate financial decisions, such as:

• Continuing payroll and paying critical vendors.
• Accessing debtor-in-possession (DIP) financing.
• Extending payment terms with certain creditors.

It’s essential to review these motions closely, as they can impact your ability to recover funds. If necessary, consider objecting or negotiating better terms.

6. Assess Critical Vendor Status

Some creditors may qualify as critical vendors, meaning the debtor cannot continue operations without their goods or services. If you provide essential supplies, equipment, or services, you may be able to negotiate priority payment terms to ensure you get paid sooner rather than waiting for a repayment plan.

7. Monitor the Debtor’s Plan of Reorganization

The debtor must eventually submit a plan of reorganization, which outlines how debts will be restructured and repaid over time. This plan can impact how much you recover and when. Key considerations include:

• Are your claims being paid in full, in part, or not at all?
• What are the proposed repayment terms?
• Do secured creditors get preferential treatment?
• Are there unfair advantages given to certain creditors?

As a creditor, you have the right to object if the plan is unfair or fails to adequately address your claim.

8. Confirm Lien and Bond Rights

Unlike Chapter 7, where assets are sold off, secured creditors in Chapter 11 may still have leverage. If your company holds liens on collateral or bond claims, you may have better recovery options than unsecured creditors. Work with legal counsel to ensure these rights are properly enforced.

9. Consider Objecting or Negotiating

If the proposed reorganization plan is unfavorable, you don’t have to accept it as-is. Creditors can:

• Object to unfair repayment terms in court.
• Negotiate better terms before the plan is finalized.
• Vote on the plan if they belong to an affected creditor class.

Strong legal representation can help you maximize recovery and minimize losses in a restructuring case.

Be Proactive – Protect Your Interests

Unlike Chapter 7, where recovery options are often limited, Chapter 11 gives creditors more opportunities to negotiate, object, and secure repayment. But missing deadlines or failing to assert your rights could mean financial losses.

At Wagner Falconer & Judd, we help credit managers and finance professionals navigate the complexities of Chapter 11 bankruptcy with confidence. Contact us today to ensure your business is protected throughout the process.

Trademarks are powerful tools for protecting your brand identity, ensuring your hard work and creativity are safeguarded. Whether you’re launching a new product, starting a business, or simply curious about intellectual property, knowing how trademarks work is essential.

If you’ve ever wondered how trademarks can protect your brand, let’s break it down:

When Should Think about Getting a Trademark?

You should consider trademarks early-ideally when choosing a name. Early planning helps protect your brand and reduces the risk of infringing on other’s trademark rights.

How Long Does it Take to get a Trademark?

The trademark registration process isn’t quick and can vary based on USPTO’s workload and application specifics. Currently, it takes approximately 14-15 months from application to registration.

I am Interested in Getting a Trademark, Where do I Start?

A clearance search is essential when registering a trademark. It checks federal and state databases to ensure your trademark is available. Let us handle this crucial step for you.

Do I Have to be Offering the Product/Service Before Applying for the Trademark?

No, you can file on an Intent-To-Use basis to reserve your trademark for up to 6 months, with the option for extensions.

Once my Trademark is Registered, What Does it Protect and for How Long?

A trademark protects the good and services listed in your application. Maintenance filings are required after 5 years and every 10 years to keep it active.

Starting January 1, 2025, New York will become the first state in the coutnry to offer Paid Prenatal Leave, setting a precedent for employment legislation nationwide. This groundbreaking law grants employees 20 hours of paid leave for healthcare services related to pregnancy. These services include physical examinations, medical procedures, monitoring, testing, and discussions with healthcare providers about pregnancy.

Key Details Employers Need to Know:

• Coverage for all Private Employers: Regardless of size, all private employers in New York must comply with this law. Whether your business employs one person or 1,000, Paid Prenatal Leave is mandatory.
• Immediate Eligibility: Employees are entiltled to Paid Prenatal Leave from the moment they are hired, eliminating any waiting periods for eligibility.
• Additional to Sick Leave: Paid Prenatal Leave is in addition to New York’s existing Sick Leave Requirements. Employees are entiltled to 40 or 56 hours of Sick Leave (depending on employer size) plus an additional 20 hours specifically for prenatal care.

What This Means for Employers

This new requirement adds to the already complex framework of employment laws in New York. Employers must adjust their policies, track Paid Prenatal Leave seperately from other leave types, and ensure they remain compliant to avoied potential penalties. The law’s universal application, even for small businesses, means no employer is exempt from these changes.

Partner with WFJ to Stay Ahead

Navigating employment legislation can be challenging, especially with New York setting new precendents.. WFJ’s Compliance Center is here to help. Our team of experienced attorneys and SHRM-certified professionals can guide you in updating your policies, answering your questions, and ensuring compliance with the Paid Prenatal Leave law and other evolving regulations.

Don’t wait until you’re impacted by a new law-contact WFJ today to partner with a legal team dedicated to keeping your business compliant and protected in the face of ever-changing employment laws. 

As the calendar flips to 2025, several new laws take effect in Minnesota, impacting everything from public health to renter’s rights. Here’s an overview of the key changes Minnesotans should know:

PFAs Ban

Minnesota has taken a bold step in environmental protection by banning products that intentionally include “forever chemicals”, knows as PFAs. These chemicals, linked to serious health issues such as cancer, thyroid disease, and low birth rates, have been found globally in water, soil, wildlife, and humans. This measure aims to reduce the exposure and protect public health and the environment.

Medical Costs and Coverage

Healthcare affordability sees improvements with the following changes:

• Prescription Drug Caps: Health plans can no longer charge more than $25 for a one-month supply of chronic disease medications, including those for diabetes, asthma, and allergies. Related medical supplies, such as syringes and insulin pumps, are capped at $50 per month.
• Wig Coverage: Health plans must now cover the cost of scalp hair prostheses (wigs) for individuals experiencing hair loss due to medical conditions or treatments.

Renter’s Rights

A series of new laws strengthen protections for tenants:

• Tenant Associations: Tenants can form associations to advocate for improved housing conditions, amenities, or community life without fear of retaliation from landlords.
• Construction Delays: Landlords must provide remedies if a tenant’s move-in date changes due to new construction delays.
• Utility Shut-Off Protections: Residential utility customers are protected from having their electric or natural gas services shut off between October 1 and April 30, ensuring access during the colder months.

Automatic Criminal Record Expungement

Minnesota is giving a fresh start to an estimated 500,000 residents. Nonviolent misdemeanors and certain low-level felonies will be automatically expunged if the individual has remained crime-free for two to five years. This initiative supports rehabilitation and helps reduce barriers to employment and housing.

Crackdown on Junk Fees

To increase transparency and fairness, businesses can no longer advertise goods or services without including all mandatory fees or surcharges. This law targets hidden costs in concert tickets, hotel bookings, and restaurant bills.

Salary Transparency in Job Postings

Minnesota employers with 30 or more employees must disclose the salary range or fixed pay rate in job postings. This measure promotes pay transparency and equity for job seekers.

Candidacy Filing Requirements

Candidates for pubic office must present a valid driver’s license or state ID with their current address, or other proof of residency, when filing an affidavit of candidacy. This change ensures accuracy and accountability in the electoral process.

Binary Trigger Ban

In an effort to enhance public safety, Minnesota has banned guns with binary triggers. These devices allow firearms to discharge on both the pull and release of the trigger, significantly increasing firing rates.

These new laws reflect Minnesota’s commitment to environmental stewardship, public safety, healthcare accessibility, and social equity. As these changes take effect, residents and businesses alike should familiarize themselves with the updates to ensure compliance and take advantage of the new protections.

The holiday season is a time for joy, celebration, and bonding with colleagues, but it can also be a potential legal minefield if not handled thoughtfully. At Wagner, Falconer & Judd, we believe in celebrating responsibly-because nothing dampens holiday cheer like a post-party HR nightmare. Here’s how to host a holiday party that’s festive, fun, and free from liability concerns.

Why Holiday Parties Pose Legal Risks

Holiday parties are an extension of the workplace, meaning employers can still be held liable for incidents that occur. Common risks include:

• Harassment claims stemming from inappropriate jokes, comments, or behaviors
• Alcohol-related incidents that lead to poor decision-making or accidents.
• Discrimination issues if the event feels exclusionary to certain groups.

With a few protective steps, you can minimize these risks while still throwing a memorable event.

Set Expectations in Advance

Clear communication is key. Send an email or memo before the party reminding employees of expected behavior. Consider including:

• A brief refresher on your company’s harassment and conduct policies.
• A friendly reminder that the event is a work-sponsored function. “Let’s celebrate responsibly!”

By setting expectations early, you reduce the likelihood of incidents occurring.

Manage Alcohol Consumption

Alcohol often loosens inhibitions, which can lead to unprofessional behavior. To minimize risk:

• Limit drinks by using drink tickets or offering a cash bar after a certain point.
• Hire professional bartenders trained to recognize when someone’s had too much.
• Offer non-alcoholic options prominently, showing inclusivity and encouraging moderation.
• Provide transportation such as rideshares, shuttles, or designated drivers to prevent impaired driving.

These steps demonstrate your commitment to employee safety and reduce the chance of alcohol-fueled accidents.

Foster and Inclusive Atmosphere

Holiday parties should be welcoming to all employees, regardless of religious beliefs or personal preferences. To ensure inclusivity:

• Choose neutral themes like “Winter Wonderland” or “Festive Celebration”.
• Offer a variety of food and drink options to accommodate dietary restrictions.
• Plan activities that encourage everyone to participate, such as games, raffles, or contests that don’t revolve around alcohol.

Creating an inclusive environment reduces the risk of employees feeling excluded or uncomfortable.

Train Managers to Lead by Example

Your leadership team should understand their role in setting the tone. Provide guidance to managers on:

• Maintaining professionalism during the event.
• Recognizing and addressing issues before they escalate.
• Supporting employees who may feel uncomfortable or need assistance.
• Understanding reporting requirements should an incident occur.

When managers lead by example, employees are more likely to follow suit, reducing the risk of misconduct.

Reinforce and Review Your Harassment Policy

Ahead of the event, take the opportunity to review and reinforce your harassment policy. This can be done through a short refresher training or written reminder. Be sure to clarify:

• What constitutes inappropriate behavior.
• How employees can report concerns.
• The steps management will take to address any issues.

Reinforcing your policies demonstrates your commitment to a respectful workplace and can help prevent potential legal claims.

Address Post-Party Feedback

Following the event, encourage employees to share feedback. Create an open channel for reporting concerns and take action promptly if any incidents arise. Document any complaints and follow your company’s standard procedures for handling workplace issues.

WFJ: Your Trusted Partner in Employment Law

Even with the best planning, unexpected issues can arise. Having a legal partner like WFJ can help you navigate challenges, from policy reviews to handling harassment claims. We’re here to support you in creating a safe, inclusive, and legally sound work environment. With these tips, your company holiday party can be a time for celebration without the legal headaches. Here’s to making your holiday season merry, bright, and liability light! 

On December 3, 2024, a federal court in Texas issued a nationwide preliminary injunction blocking the enforcement of the Corporate Transparency Act (CTA). The court ruled that the CTA is unconstitutional, meaning businesses are not currently required to comply with the reporting deadlines.

For now, this ruling means that:

• Companies formed before January 1,2024, are not required to file their beneficial ownership information by the general deadline of January 1, 2025.
• Companies formed on or after January 1, 2024, are not required to meet the 90-day reporting deadline after their formation date.

It’s important to note that this is a preliminary injunction. The decision could be appealed to a higher court, and the injunction may be lifted or overruled. At the time of this post, FinCEN-the agency responsible for enforcing the CTA-has not publicly addressed its plans following the court’s decision.

Ongoing Legal Challenges

The Texas case isn’t the only one questioning the constitutionality of the CTA. In Alabama, another federal court also ruled the law unconstitutional but limited the ruling to the plaintiffs in that case. The government has appealed this decision to the Eleventh Circuit Court of Appeals.

The outcome of these cases is uncertain. The Eleventh Circuit could affirm or reverse the Alabama court’s ruling, or it could send the case back to the lower court without deciding on the constitutionality of the law. Whether this happens before the January 1, 2025 deadline is unknown, as is whether any ruling would apply nationally or only to specific parties.

What Should Businesses Do?

Given the legal uncertainty, WFJ recommends that businesses continue preparing to comply with the CTA’s reporting requirements:

• If your company was formed before January 1, 2024, be ready to file your beneficial ownership information by the January 1, 2025, deadline.
• Companies that fail to comply-if the law is ultimately enforced-could face serious penalties, including criminal and civil consequences.

Our team is closely monitoring developments in these cases and any updates from FinCEN. If you have questions about your compliance obligations or how this ruling might impact your business, WFJ is here to help.

Stay informed and protected-reach out to us today for guidance.

The Corporate Transparency Act (CTA) is quickly approaching its critical deadline, and it’s essential for all LLC owners to take action now. Starting January 1st, 2025, certain business entities will be required to file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN) or face steep penalties. If your business is subject to the CTA, now is the time to ensure you’re compliant.

Why the Deadline Matters

The January 1 deadline isn’t just a suggestion-it’s a hard cutoff. Businesses that fail to comply with the CTA could face severe penalties, including fines up to $10,0000 or imprisonment for up to two years. Missing this deadline could put your business at significant risk, and the consequences of non-compliance are steep.

Preparing now to meet the CTA requirements ensures that your business stays on the right side of the law and avoids unnecessary complications. Don’t wait until the last minute-act today to stay compliant and protect your business.

Is Your Business Ready?

Under the CTA, many businesses, including LLCs, corporations, and other entities formed under state law, must report their beneficial owners. These are the individuals who own or control at least 25% of the company or have substantial control over its operations. If you’re unsure whether your business needs to report, it’s crucial to seek legal advice to determine your compliance obligations.

The CTA’s requirements apply to a wide range of businesses, so even if you think your business might be exempt, it’s worth confirming your obligations. Compliance isn’t optional, and getting it right can save you from future headaches.

How Can WFJ Help?

At Wagner, Falconer & Judd, we’re here to help you through the complexities of the CTA and ensure your business is prepared for the upcoming deadline. Here’s how we can help:

• Assessment and Planning: We’ll help you assess whether your business needs to report under the CTA and create a plan to gather the necessary information.
• Accurate Reporting: We’ll guide you in accurately identifying and documenting your beneficial owners to meet FinCEN’s strict filing standards.
• Ongoing Support: The CTA’s reporting obligations are not a one-time event. As your business evolves, we can provide ongoing support to ensure continued compliance beyond January 1, 2025.

Don’t Wait-Act Now

The January 1, 2025 deadline is fast approaching, and it’s crucial to prepare early. By partnering with WFJ, you can ensure your business is ready to meet its obligations and avoid costly penalties. Our experienced legal team is ready to help you navigate the CTA’s requirements so you can focus on running your business with confidence.

Contact us today to schedule a consultation and take the first step toward compliance. Time is running out-don’t let this deadline sneak up on you!