BKwire’s proprietary software interacts with Pacer.gov to extract all bankruptcy filings and companies impacted, sorting through thousands of filings daily and categorizing them into the appropriate BKwire Zones, Chapter Types, Geographical area, and other key metrics.
BKwire Key Terms/Definitions
Corporate Bankruptcy – is a debtor that has filed for bankruptcy protection under federal law, which is a legal process that provides relief from debts and a fresh start to the financial situation, but it can have long-term consequences.
Impacted Business – is an unsecured creditor that extended credit to another company without first obtaining a collateral agreement. In the event of bankruptcy or default, unsecured creditors are lower in priority compared to secured creditors and have a higher risk of not being repaid.
Loss – the unsecured claim amount displayed on the bankruptcy schedule.
Bankruptcy Petition – Provides detailed information about the debtor (bankrupt company) financial situation, including their assets, liabilities, income, expenses, and debts. The court uses this information to determine the dischargeable debts and exempt assets, making it a crucial document in the bankruptcy process.
Case Information – MVP Refresh only – a chronological list of each business bankruptcy event summarizing the court proceeding.
The BKwire Zones – BKwire’s algorithm groups companies into 18 different sectors, allowing you to quickly locate businesses relevant to their own industries.
Corporate Bankruptcy Types:
- 7 Liquidation (Official form 201) A chapter 7 bankruptcy terminates the company’s operations and liquidates its assets. A trustee is appointed to oversee the process of maximizing creditor repayment from these assets.
- 11 Reorganization (Official form 201) The section of the Bankruptcy Code that provides for reorganization, usually involving a corporation or partnership. In a chapter 11 proceeding, companies propose a plan of reorganization that allows them to continue operating their business while paying suppliers or creditors over time.
- Involuntary (Official form 205) Under the bankruptcy code, suppliers/creditors can initiate an involuntary bankruptcy action against a debtor by filing a petition with the court. The conditions that must be met under Section 303 of the bankruptcy code include:
- A single Supplier/creditor can generally initiate an involuntary bankruptcy if: There are fewer than 12 unsecured creditors. They are owed a certain amount of money ($16,750 as of 2022)
- Multiple suppliers/creditors can generally commence an involuntary bankruptcy if: At least three creditors participate in the petition. They are collectively owed a certain amount of money ($16,750 as of 2022)
- Sub Chapter V bankruptcy Available to businesses that are pursuing business activities and have debt of up to $2.75 million. The Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted in March 2020 to aid small businesses struggling as a result of the pandemic. The law expanded Subchapter 5 eligibility for one-year debt relief to companies with debts up to $7.5 million. Subchapter V benefits included continued business operations, no creditor approval, only the bankrupt business can file a plan, special trustee, expenses paid in installments.
Date Added vs Date Filed – BKwire allows you to sort the corporate bankruptcy results by either the date they were added to the BKwire system (Date Added), or the actual date filed in the corresponding bankruptcy court (Date Filed). When you’re looking at the bankrupt companies, occasionally the filing date isn’t immediately available. That’s because each district bankruptcy court updates PACER with new cases at different times, and it can take up to two days for a case to appear in BKwire’s database. BKwire adds all companies to the database as they are available in the PACER system.
Trustee – An individual to oversee a bankruptcy case, responsible for administering the bankruptcy estate and ensuring that the process is fair and equitable for all parties involved. Their duties include reviewing the debtor’s financial affairs, liquidating assets, collecting, and distributing payments to creditors, and resolving disputes between the debtor and creditors.