In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides expert insight on the Chapter 11 bankruptcy process.
Article Link: https://therealdeal.com/la/2023/07/20/company-behind-kw-advisors-files-for-chapter-11/
Summary
R&LS Investments, a company operating as a dba of KW Advisors, a Santa Monica-based brokerage, has filed for Chapter 11 bankruptcy. The filing indicates that the company owes less than $7.5 million with assets estimated between $500,000 and $1 million. Among the creditors are an LLC linked to real estate investor David Taban, City National Bank, Citi Bank, and CoStar, with additional smaller debts. Adam Stein-Sapir, a bankruptcy expert at Pioneer Funding Group, explains that Chapter 11 allows for the renegotiation of contracts, including leases and bank debts, which become frozen upon filing for bankruptcy. The bankruptcy does not affect KW offices, as they are independently owned. Rick Cunningham, who heads R&LS Investments, has a history with Keller Williams and owns other brokerages under the Cunningham Group.
- R&LS Investments, associated with KW Advisors, has declared Chapter 11 bankruptcy with debts less than $7.5 million.
- Creditors include entities linked to real estate, banking, and service industries, with contested and uncontested debts.
- Adam Stein-Sapir clarifies that Chapter 11 freezes debts and provides a platform to renegotiate contracts, including leases and loans.
Q&A
What is the impact of a Chapter 11 bankruptcy filing on company contracts and debts?
Chapter 11 bankruptcy allows a company to renegotiate its contracts and debts, which become frozen upon filing. This can include leases, bank debts, loans, and civil claims. For more information on the bankruptcy process, visit Pioneer Funding LLC’s bankruptcy overview.
How does a Chapter 11 filing affect the relationship between a franchised business and its independently owned offices?
In the case of R&LS Investments and KW Advisors, the bankruptcy filing by R&LS Investments does not affect the independently owned KW offices. Each office operates separately, and the bankruptcy of one entity within the franchise does not necessarily impact the others.
What are the options for creditors when a debtor files for Chapter 11 bankruptcy?
Creditors have several options, including participating in the bankruptcy proceedings, filing a proof of claim, and monitoring the case for developments. They may also consider selling their bankruptcy claim to trade claim buyers for immediate cash, as waiting for a resolution can be lengthy and uncertain. For guidance on this process, creditors can refer to Pioneer Funding LLC’s guide on selling bankruptcy claims.
