Lessee Banruptcy and Equipment Return

This is a discussion on Lessee Banruptcy and Equipment Return within the Business Bankruptcy forum, part of the Starting a Business category; Creditor (Lessor) is in CA. Debtor (Lessee) is in MS. Lessee completed agreed-to lease payments. Lease contract calls for Surrender ...

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Old May 2nd, 2007, 08:52 AM   #1
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Exclamation Lessee Banruptcy and Equipment Return

Creditor (Lessor) is in CA. Debtor (Lessee) is in MS. Lessee completed agreed-to lease payments. Lease contract calls for Surrender of equipment once all payments are completed. Lessor offers buy-out as alternative to equipment return. Lessee refuses to communicate with Lessor until Lessor advises it will seek criminal complaint. Lessee advises that it is filing Chapter 11, provides attorney name but no other contact info. Lessor finds attorney, explains situation, advises that Lessee has no equity in equipment and equipment needs to be returned or purchased. Lessee advises attorney it is not attempting to collect a debt but is trying to reclaim equipment. Attorney says he will discuss with client and update Lessor. Attorney does not call back for several weeks, despite numerous emails requesting an update and copies of Bankruptcy petition and schedules. Finally Lessor advises through email that it feels it has no other avenue but to inquire with local DA about criminal charges for illegal possession of our equipment (UCC1 was properly filed). Attorney responds this time advising Lessor that its 'threats' in an attempt to collect a debt or gain possession of personal property' are inappropriate and will 'be dealt with accordingly'.

Is the debtor or the attorney required to provide a copy of the bankruptcy petition and schedule to creditors?
Is the attorney required to respond to creditors in a timely manner? If so, what is considered to be timely manner?
Did the Lessor violate Bankruptcy protection laws by suggesting that they would "inquire" about filing criminal charges? If so, what are the implications of same?
I thank any of you who can answer these questions.
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Old May 3rd, 2007, 04:01 PM   #2
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Default Re: Lessee Banruptcy and Equipment Return

Yes--you have to have been sent the bankruptcy court documents and then you can deal with them there. If you are not sent the docs you have no notice of the matter and you are not bound. But ask the lawyer to tell you which court etc. and call the clerk of the court too, as a backup.
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Old May 4th, 2007, 06:36 AM   #3
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Default Re: Lessee Banruptcy and Equipment Return

Thanks for taking the time to provide your answer. It sounds like what you're saying means the attorney can't cause any trouble for the actions taken so far. But what about 'actual notice'? Either way, it seems to me the attorney has a responsibility to provide a copy of the petition.
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Old May 5th, 2007, 10:43 AM   #4
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Default Re: Lessee Banruptcy and Equipment Return

That is why you should call the court to confirm what is happening.
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