Existing claims do not expire merely because a company changes its legal form or is otherwise reorganized. It is therefore necessary to determine which continuing or successor company will assume each liability. The reorganization plan should set out this assignment clearly and consistently with the other company records. The company must also determine which known creditors must be informed directly about the planned restructuring. Depending on the applicable requirements, a public notice may also be necessary. The notice should clearly describe the type of reorganization, the future assignment of claims, and the available ways to respond. The rules on filing claims and requesting security must be observed for existing claims. Creditors may also have the right to raise objections, which must be exercised within the applicable requirements. Contracts, outstanding items, and security provided should be fully recorded and reconciled with the intended legal succession. This makes it clear which company a claim is against once the reorganization takes effect.
Creditor Protection in a Company Reorganization in Georgia
Creditor protection during a company reorganization in Georgia requires a clear assignment of existing claims to the continuing or successor company. It is also necessary to determine which creditors must be informed and what rights they have to file claims, request security, or raise objections.
Tip
Creditor protection begins with a complete and clear assignment of all claims and security. Individual notice, public notice, filing a claim, requesting security, and raising an objection are separate measures. The reorganization does not extinguish existing claims.