Seven tips for reporters
to remember when venturing
into U.S. Bankruptcy courts.
1. When following a bankruptcy case, obtain a list of creditors - then turn them into sources.
The bankruptcy file includes a list of creditors, usually in a creditor
"matrix." The initial filing itself tells who is owed the most
money. The creditors and their attorneys are generally faced with the prospect
of collecting substantially less than what they are owed. Given those odds,
these people are likely to be chatty with journalists.
2. Double check with "unsecured creditors."
Unsecured creditors are the group paid last. It typically includes an
office supply company, a copier business and a range of others lumped together
as trade creditors. Their chances of recovering much of their money is
slimmer. They have been known to vent their frustrations with reporters.
3. Tap into the bankruptcy bar.
The only thing to drink here is information. The
bankruptcy bar is made up of attorneys who specialize in representing debtors
and creditors. It is a close-knit group in many cities, which can work
in a reporter's favor. While bankruptcy lawyers may have ethical problems
discussing their own clients, they frequently are willing to talk about
other's clients. They often can point to recent filings.
4. Ask to listen to the audio tapes from the bankruptcy hearings.
Like some other court proceedings, the U.S. Bankruptcy Court tape records its open court sessions. But unlike other court proceedings, the Bankruptcy Court makes the tapes available. If you miss a critical hearing, just ask the court clerk to listen to the tapes.
Or ask the court to make you a copy. (In St. Louis
the dubbing fee is $15 for a 90-minute cassette.)
5. Find out if there are any "preference" actions in the bankruptcy case or "adversary proceedings."
The bankruptcy court has the ability to undo debtor payments under certain conditions. Usually these are payments a debtor makes to family members or dose business associates just before a debtor files for bankruptcy. These are known as "preferences."
"Adversary proceedings" usually are creditor
suits to keep the court from discharging their debt. These suits also can
come from bankruptcy trustees suing to recover preference payments.
6. Be sure to make clear what chapter of the bankruptcy code a bankruptcy is filed.
The Associated Press stylebook answers this question.
Here are the more common bankruptcy law sections:
Chapter 7 - sometimes referred to as straight bankruptcy, it usually leads to liquidation.
Chapter 11 - this is the most common form of business bankruptcy. If frees debtors from threats of lawsuits while they try to work out how to pay their debts.
Chapter 13 - is the section wage earners file.
7. Need information from another bankruptcy court?
One source is Bankruptcy Services, Inc. They have
a contract with the bankruptcy courts to provide copies at most bankruptcy
locations. The company has offices in Oklahoma City (405-232-9521 fax),
St. Louis (314421-5046 fax) and Plano, Texas (214424-1551 fax). Be sure
to ask for a fee schedule.
Prepared by Rick Desloge of the St Louis Business Journal for the Investigative Reporters and Editors conference, June 17, 1994, in St Louis.