Representation: General Electric Capital Corporation
Bankruptcy – Western District of Pennsylvania
Situation: Shotrock, Inc., a construction company, borrowed monies from General Electric Capital Corporation and secured the loan with equipment. The corporation was liable, and the company’s principals guaranteed the loan.
Following Shotrock, Inc.’s bankruptcy filing, General Electric Capital Corporation retained Bernstein and Bernstein, P.C. to obtain relief from the automatic stay so it could repossess and liquidate Shotrock, Inc.’s collateral and pursue guarantors for any deficiency left owing after the collateral was sold.
Action: The parties agreed to a stipulation providing for certain “use” payments for equipment and the right to sell all of the equipment according to a predetermined schedule. The stipulation worked to both parties’ benefits as the collateral liquidated quickly at more-than-expected amounts, leaving lower-than-expected deficiency claims against the guarantors.
Guarantors disputed the amount of the deficiency but ultimately settled the dispute by paying additional amounts to General Electric Capital Corporation.