West Virginia High Technology Consortium Foundation Files for Bankruptcy

by San Antonio Attorney

The West Virginia High Technology Consortium Foundation along with its holding company has filed for bankruptcy.

The Chapter 11 filing comes after a $20 million lawsuit was filed by Huntington National Bank against the foundation and consortium.

Due to the debtor’s protection provided by the automatic stay, all legal actions against the foundation have been put on hold.

High Technology listed assets from $10 million to $50 million and debts from $10 million to $50 million.

The filing requires disclosures of relevant information, such as summary of debts and assets, financial statements, certain unsecured creditors and employee pay records.  The deadline for submission of these documents is two weeks from the date of filing.

The bankruptcy filing also comes with a special motion to give compensation to Chapter 11 workers, and special motions to utilize cash collateral and to utilize existing bank accounts.

Foundation CEO and President Jim Estep has said the breach of contract lawsuit was unexpected.  According to him, the officials of the foundation had been conferring with the bank in good faith.

Chapter 11 debtors have 18 months to submit a reorganization proposal to the bankruptcy court.

Bankruptcy provides several protections to debtors.  One very important protection is the automatic stay, which stops all creditors’ efforts to collect debt payments within the duration of the bankruptcy.

However, creditors may ask the judge to terminate the debtor’s exclusive right to formulate a reorganization plan.  Basically, it means the creditors would be allowed to submit their own reorganization plans for the debtor.  Then creditors can vote on the reorganization plans.

Creditors can also push for a sale of the debtor’s assets.  The money generated from the sale would be used to repay creditors based on the priority of debts.

Filing for bankruptcy is beneficial to High Technology as it allows the foundation to come up with a strategy to sort out its finances and deal with everyone it owes.

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