Dealing with litigation is a common part of the business environment, whether your business is involved in a lawsuit directly, or if some part of your business is indirectly affected by a lawsuit. Since keeping track of your assets related to that litigation can take years, it is not uncommon for title to those assets to get misdirected. Here are a few ways that litigation can create asset recovery issues:
Holding Up Payments for Goods and Services
When a business gets involved in a lawsuit over payment for goods or services, those payments can get held up in court while the lawsuit is being resolved. This can mean waiting to be paid for months or years while the litigation is being sorted out. By the time the suit is resolved, it may require asset recovery services simply to ensure the payment makes it where it was supposed to go.
Restricting Repayment on Outstanding Debts
Bankruptcy litigation is notorious for causing asset recovery issues, because of something known as the automatic stay. While the automatic stay is in place, creditors cannot collect debts due from the bankrupt. Business bankruptcy cases can take a decade or more to resolve. So even if you can ultimately recover what you are owed from the bankrupt, it may still require asset recovery services to ensure the money makes it into your possession.
Dispute as to Who Owns Assets
Another problem that can occur is when businesses dispute the ownership of certain assets. It can lead to money or property being held up by the courts, delaying delivery of the assets and making it more likely that asset recovery services will be needed.
Obscuring Where Assets Are Located
Mergers and acquisitions are another common source of litigation that can create asset recovery issues. As the companies remodel themselves to suit their new business relationship, a lot of assets can get moved around, sometimes between different states or even different countries. When the dust settles, you may lose track of where everything is, which can become a nightmare for a company still adjusting to the new merger or acquisition.
Dealing with Personnel Changes or Organizational Issues
The sheer amount of time it can take for a lawsuit to resolve can mean that a company experiences personnel changes or organizational shifts while it is ongoing. This can lead to documents being lost or forgotten, or other problems that can lead a company to lose track of assets. A company may not even realize it has lost anything until it has investigated what assets might be lingering in state unclaimed asset trusts.
Did Litigation Cost You Assets You Never Recovered?
With billions of unclaimed assets sitting in state funds, you potentially have a great deal to gain. Call our Cooperstown office at 607-547-1195 to discuss your situation.
