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LPO lightens load for Chapter 11

Early-year corporate insolvency statistics have provided evidence that Chapter 11 bankruptcies are poised to increase. While around 6,200 bankruptcy petitions were filed over 2007, 2,700 have been filed from January to April this year – a number approaching half of last year’s figure. With the credit crunch weighing heavily on corporate fortunes, and recession fears combining with rising costs to create turbulent business conditions, many firms will be seeking to insulate themselves from terminal decline.

Legal outsourcing has established itself as a productive route that firms can explore in order to place their Chapter 11 measures in trustworthy hands. Able to offer a range of tailor-made solutions, an LPO can steer a client through an entire cycle of bankruptcy protection and provide relevant expert advice at every stage, assisting with:

  • Reviewing contracts drafted in a firm's pre-petition era
  • Reviewing documents for creditors who are investigating a debtor's finances on due diligence grounds
  • Facilitating claims reconciliation and determining the accuracy of those claims
  • Planning any structural changes required in the run-up to a firm's post-bankruptcy period

 

CPA legal process consultant, Stephen D Kong, says: 'Naysayers will argue that things haven't changed much in bankruptcy practice in recent years and that traditional legal approaches to due diligence, contract analysis, claims review and the like are doing just fine. But that position couldn't be more wrong. Using LPO to handle some of the core, bankruptcy legal functions [enables] a company … to properly comply with its mounting compliance obligations, while empowering [it] to assert control over escalating legal costs.'

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