In this article, Adam Stein-Sapir of Pioneer Funding Group provides insights on the bankruptcy filing of Belmont Trading.
Article Link: https://resource-recycling.com/e-scrap/2023/09/13/amid-t-mobile-suit-belmont-trading-files-for-bankruptcy/
Summary
Belmont Trading, an ITAD and used electronics reseller, has filed for Chapter 11 bankruptcy protection amidst a lawsuit from T-Mobile, which claims Belmont owes them over $6 million. The bankruptcy filing reveals Belmont’s assets at $2.58 million against liabilities of $15.77 million. The filing came shortly after T-Mobile sought a summary judgment for the amount owed. Belmont Trading’s debts extend beyond T-Mobile to a shareholder, the U.S. Small Business Administration, and several OEMs. The company’s assets include interests in subsidiaries and potential tax refunds, but the exact amounts are unclear due to an unreleased tax return.
- Belmont Trading filed for Chapter 11 bankruptcy with $2.58 million in assets and $15.77 million in liabilities.
- T-Mobile is seeking a summary judgment for $6.08 million, which is part of the $6.60 million they claim Belmont Trading owes them.
- Belmont Trading’s largest unsecured claim, aside from T-Mobile, is $1 million owed to a shareholder.
Q&A
What does a Chapter 11 bankruptcy filing entail for a company like Belmont Trading?
Chapter 11 bankruptcy allows a company to reorganize its debts and continue operating while attempting to become a viable business again. It provides an opportunity to create a plan to pay creditors over time, but it does not guarantee that a judge won’t order the liquidation of the company’s assets.
How does a lawsuit like the one from T-Mobile affect the bankruptcy process?
A lawsuit such as T-Mobile’s can precipitate a bankruptcy filing, as it can add to the financial pressures on a company. Once bankruptcy is filed, actions like the lawsuit are typically stayed, and the claims become part of the bankruptcy process where they may be resolved through the reorganization plan.
What are the implications for creditors when a debtor like Belmont Trading files for bankruptcy?
Creditors may face a delay in payment and potentially receive less than the full amount owed. Unsecured creditors, in particular, are at risk of recovering little to nothing. In such cases, creditors might consider selling their bankruptcy claims to trade claim buyers to mitigate risk and obtain immediate cash. For more information on this process, visit Pioneer Funding LLC’s guide to selling bankruptcy claims.
