Doing Business with a Financially Troubled Company
Avoiding bad debts and uncollectible receivables is every bit as vital to the health of a company's business as increasing sales or lowering operating costs and expenses, says FEDA's Legal Counsel George Keeley
By George Keeley, Attorney Keeley Kuenn & Reid gkeeley@kkr law.com
T
he old legal maxim of caveat emptor—let the buyer beware— has little application today to the
customer who purchases goods on open account. Instead, in extending unsecured credit, a modern-day seller can more closely identify with anoth- er maxim—caveat venditor—or let the seller beware. Many unsecured sellers are dismayed to learn that the federal bankruptcy law has generally eased the burden on debtors and made it more difficult for creditors to collect their due. To make matters worse, collection lawsuits are costly, oftentimes do not result in recovery of any of the monies that are legally due, and can be immediately halted if the debtor seeks protection under the Federal Bankruptcy Code.
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