Curon Medical Inc. of Fremont, California Shuts Down And Files For Chapter 7 Bankruptcy
In California, Fremont-based Curon Medical Inc. has shut down its operation, fired all of its employees, and filed for Chapter 7 bankruptcy.
In the bankruptcy statement that the East Bay life sciences company filed with the SEC on Wednesday, Curon said that their board had met Monday and decided to voluntarily file for bankruptcy protection. This decision led to the firing of all 32 employees and the resignation of the entire board.
When a company files for Chapter 7 bankruptcy, this generally means that the company has agreed to cease operations and shut down its business. An appointed trustee will then sell, or liquidate, the bankrupt company’s assets to pay off the company’s debts.
Secured creditors, meaning the investors who’ve taken the least risk, are paid first. These are creditors whose credit is usually backed by collateral and who know they will be paid first should a company go bankrupt.
Unsecured creditors are usually paid next, and stockholders/company owners are paid last—if at all, and only after the creditors are paid first and in full.
In general, a company’s stocks lose their value. A person with bond shares might get some of it back.
In order to complete the Official Bankruptcy Forms which make up the petition and schedules, the debtor(s) will need to compile the following information:
1. A list of all creditors and the amount and nature of their claims;
2. The source, amount, and frequency of the debtor's income;
3. A list of all of the debtor's property; and
4. A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
Here are the initial steps for how to file for Chapter 7 Bankruptcy:
1) The debtor files a petition with the bankruptcy court in the area where the person lives or the business is located.
2) The debtor must file:
- several schedules of assets of liabilities.
- a schedule of current income and expenditures.
- a statement of financial affairs.
- a schedule of executory contracts and unexpired leases.
Filing the Chapter 7 Bankruptcy petition "automatically stays" most actions against the debtor or the debtor's property.
Sagaria Law, P.C. handles Chapter 7, Chapter 11, and Chapter 13 bankruptcy cases in Alameda County, Monterey County, and Santa Clara County. We have offices in Fremont, Monterey, and San Jose. Contact us today for a free consultation.
Curon Medical Halts Operations, Filing States, Mercury News/Contracostatimes.com, November 15, 2006
Corporate Bankruptcy, SEC.gov
Related Web Resource:
Chapter 7 Bankruptcy, Nolo.com
U.S. Bankruptcy Laws, Cornell Law School
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