THE CRYO SPA 2 INC. Bankruptcy Filing

THE CRYO SPA 2 INC. Bankruptcy Docket Header

What is the BankruptcyObserver Database?

All bankruptcy reporting services in the United States are based on data initially published on PACER. BankruptcyObserver actively monitors all 95 US bankruptcy courts for newly filed bankruptcy cases and newly added bankruptcy docket entries, adding new bankruptcy data hourly. BankruptcyObserver's database of bankruptcy information includes all bankruptcies filed since 2005 (and many cases from before this date) which amounts to millions of bankruptcy cases and hundreds of millions of bankruptcy docket entries.

Anyone who has tried accessing bankruptcy data using PACER will attest to the fact that the service is not easy to use. There are nearly one hundred separate servers that might hold the data that you need and the forms you can use to query the data are very limiting. BankruptcyObserver makes the process of finding and monitoring bankruptcy cases easy. We have one database and we make the data easily accessible through an easy-to-use online interface. We also keep the data up to date, updating the bankruptcy cases every night and alerting subscribers to any changes every weekday (including holidays).

BankruptcyObserver offers the option of subscribing to monitor a single bankruptcy case or subscribing to access the entire bankruptcy database. Daily emails are provided updating subscribers on activities in any cases that they are monitoring and on new bankruptcy case filings.

What is a Chapter 7 Bankruptcy? What to Expect from a Chapter 7 Bankruptcy?

Bankruptcies in the United States are governed by federal rather than state law. This includes in small and individual bankruptcies. Anyone declaring bankruptcy files with a federal court in a region where the person or entity has some rational for association. (For organizations this reasoning behind choosing a particular bankruptcy court can become rather stretched. For example a company called Pacific Lumber which owned 210,000 acres of forest land in California, filed bankruptcy in Corpus Christi, Texas. This action has been derided as "venue shopping". The courts that have benefited the most from this behavior are the bankruptcy courts in Delaware, the Southern District of New York, and the Southern District of Texas. Joe Biden is infamous for aggressively protecting company's rights to venue shop as it favors his home state district.) Bankruptcy and the rights and rules related to bankruptcies appear in Title 11 of the United States Code, beginning at 11 U.S.C 101.

Typically when looking at bankruptcy, the first question to consider is what type of bankruptcy was filed. Types are typically called "chapters" because they correspond to specific chapters of the code inside of the Title 11. Strangely the Code is not like a book, that is there are some missing chapters. (These were probably removed by Congress in subsequent legislation?) So, when you say that this is a Chapter 11 bankruptcy, you mean that the bankruptcy follows the procedures outlined in chapter 11 of Title 11 of the U.S. Code, as amended. It's important to note the "as amended" because there have been several major changes throughout the years.

Chapter 7 bankruptcy, sometimes referred to as liquidation bankruptcy, is the most basic form of bankruptcy. Both individuals and entities (corporations, trusts, partnerships, limited liability companies) can file chapter 7. Unlike chapter 11 or chapter 13 bankruptcies, Chapter 7 Bankruptcies do not involve the filed of plan or reorganization or a plan of repayment. Chapter 7 provides for the liquidation or sale of the debtor’s property with the proceeds distributed to the debtor's creditors. Some assets, primarily for individuals, are "exempt" meaning that the debtor is allowed to keep the property and any creditor liens are removed. The liquidation is most often performed by a Chapter 7 trustee who may operate the business while an orderly sale is organized. The trustee is paid from the proceeds of the asset liquidation.

Individuals filing for chapter 7 must meet a specific means test, failure to meet the test will push the debtor to either a Chapter 13 or Chapter 11 bankruptcy. In Chapter 7 bankruptcy, the absolute priority rule stipulates the order in which debts are to be paid. Under this rule unsecured debt is separated into classes or categories, with each class receiving priority for payment. Secured debt is debt backed or secured by collateral to reduce the risk associated with lending, such as a mortgage. Unsecured priority debts are paid first. Examples of unsecured priority debts are tax debts, child support, and personal injury claims against the debtor. Secured debts are paid next. Last is the payment of nonpriority, unsecured debt with funds remaining from the liquidation of assets. If there are not sufficient funds to pay the nonpriority unsecured debt, then the debts are paid on a pro-rata basis.

A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.

Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 21 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).

When a chapter 7 petition is filed, the U.S. trustee (or the bankruptcy court in Alabama and North Carolina) appoints an impartial case trustee to administer the case and liquidate the debtor's nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor's assets are exempt or subject to valid liens, the trustee will normally file a "no asset" report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an "asset" case at the outset, unsecured creditors (7) must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502(b)(9). In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor's property should consult an attorney for advice.

The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors. The trustee accomplishes this by selling the debtor's property if it is free and clear of liens (as long as the property is not exempt) or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee's "avoiding powers." The trustee's avoiding powers include the power to: set aside preferential transfers made to creditors within 90 days before the petition; undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition; and pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. 11 U.S.C. § 721.

While most Chapter 7 bankruptcies are quick, some more complicated Chapter 7 bankruptcies can drag on for many years even decades. If it is an individual who has filed chapter 7, the individual may be dismissed quickly leaving the assets with the trustee to liquidate in a manner that the trustee believes will bring the greatest value to the estate.

How Long will the THE CRYO SPA 2 INC. bankruptcy last?

Each bankruptcy is a unique set of facts, issues, and parties that makes it difficult to predict exactly how long a bankruptcy will last. There are some time limits that courts may or may not enforce that are intended to make sure that a bankruptcy case does not linger. The individual complexites of the THE CRYO SPA 2 INC. bankruptcy will determine how long it will last. According to our bankruptcy database, since 2012 the average time for a bankruptcy filing from inception to closure is 322.76 days. Averages for each chapter of bankruptcy are:

• Average duration of Chapter 7 bankruptcy cases: 280.42 days
• Average duration of Chapter 9 bankruptcy cases: 569.42 days
• Average duration of Chapter 11 bankruptcy cases: 550.42 days
• Average duration of Chapter 12 bankruptcy cases: 792.72 days
• Average duration of Chapter 13 bankruptcy cases: 874.69 days
• Average duration of Chapter 15 bankruptcy cases: 780.71 days

What Should Bankruptcy Creditors Do?

Bankruptcies can be very daunting for creditor that have not gone through the process before. The most importance advice that we can offer is to stay up date. Bankruptcies occur over time and there may be long gaps of time where nothing seems to be happening and then there is a sudden flurry of activity. If you are listed as a creditor in a bankruptcy case, you will receive occasional notices from the court. Unless it is a large bankruptcy where a bankruptcy claims administrator has been hired to manage communications with creditors, notices from the court will most likely be handled through the mail. This means that you may not know about something happening in bankruptcy case until fairly late. You can get this information by obtaining a PACER login, finding the right court, logging into the court, entering the case number, pulling the docket report, and reading through it. But remember, you will be charged for doing this and you will have to remember to go through this laborious process again every few days. (Or you can just sign up with BankruptcyObserver and let us keep you up to date.)

Other suggestions for creditors:

• Know what type of bankruptcy has been filed. Bankruptcies are not all the same. Just because a company has filed bankruptcy does not mean that all hope is lost. In chapter 11 bankruptcies, the debtor will try to reorganize to be able to continue operating. Chapter 7 bankruptcies are where companies or individuals are simply liquidating their assets. In these cases, the a trustee will likely be appointed that will assess the assets in the estate and contact the creditors.
• File a claim. Depending upon the bankruptcy chapter, you may not be able to file a claim immediately. Check on this and make sure that you file a claim as soon as you can.
• Check whether it is likely to be a payment to unsecured creditors. Item number 13 on the debtor's bankruptcy petition is a checkbox where the debtor is required to indicate whether funds will be available for distribtution to unsecured creditors or whether after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.