CRG Financial LLC (CRG) is an investment firm that provides liquidity to creditors who are holding debt against bankrupt companies (“debtors”) by purchasing their receivable. CRG offers creditors of certain debtors an opportunity to sell their receivables (known as “claims”) for an immediate cash settlement.
Frequently Asked Questions
CRG takes the guess work and expense out of the bankruptcy process and often pays within days even in the most complicated bankruptcy cases. In addition, CRG’s specialty finance vertical business needs that may arise while waiting for a bankruptcy case to conclude or “war chest” necessary to pursue litigation. While the long bankruptcy process continues, creditors are able to move forward with their businesses.
Browse these FAQs below to learn how you can sell a bankruptcy claim and recover cash now.
Why did I receive a call or letter from CRG?
Why doesn’t the debtor pay me?
The Chapter 11 filing precludes the debtor from paying obligations, including obligations to many of its vendors and suppliers, incurred before the date that it filed for bankruptcy protection. Invoices for these obligations are now considered pre-petition claims and will be dealt with through the bankruptcy process.
What are the benefits of selling my bankruptcy claim?
Elimination of Recovery Risk: Unsecured creditors are the last creditors in line to receive distributions. In many cases, recoveries are low or non-existent for unsecured claims after administrative expenses (lawyer and advisor fees) and secured creditors are paid. Selling your non-performing claim for cash allows you to secure a definitive recovery, eliminating the risk of an uncertain bankruptcy outcome.
Immediate Cash Conversion: The average duration of a corporate bankruptcy case is approximately 1-2 years from the petition date to the plan effective date, but many cases take far longer due to litigation, disputes between creditors, facility shutdowns, and labor issues. Selling your non-performing claim for cash eliminates the time risk associated with a bankruptcy case and allows you to immediately re-invest the proceeds back into your business.
Elimination of Consideration Risk: Assuming there is sufficient value remaining at the conclusion of a bankruptcy case, unsecured creditors may receive distributions of notes, stock, cash or a combination thereof. Notes and stock are difficult and costly to liquidate and often cannot be sold immediately. Selling eliminates the risk of receiving illiquid securities.
Elimination of Time and Cost associated with the Bankruptcy Process: Corporate bankruptcy cases involve a great deal of paperwork and correspondence between the Debtor, the bankruptcy court and creditors. Selling your non-performing Trade Claim for cash eliminates the time, money and valuable human resources required to follow and participate in a bankruptcy case from beginning to end.
Potential Tax Benefit: Selling may provide your company with a tax benefit by applying the loss on the uncollected portion of your receivable against current Income. Please consult with a tax professional for advice on your specific situation.
When will CRG pay me?
The entire process from first contact to receiving your funds can be completed within a few days. CRG can wire payment within 24-48 hours of receiving the complete documentation on the claim.
What if I choose not to sell my bankruptcy claim?
The Chapter 11 filing precludes the debtor from paying obligations, including obligations to many of its vendors and suppliers, incurred before the date that it filed for bankruptcy protection. Invoices for these obligations are now considered pre-petition claims and will be dealt with through the bankruptcy process.
How does CRG determine its offer price?
CRG bases its offer price on several factors, including the prospects and level of recovery (which encompasses the Debtor’s financial condition, trends in the Debtor’s industry and any litigation against the Debtor), the estimated time until recovery, the potential for receiving illiquid stock or notes and our required return.
What information is available so that I can evaluate CRG’s offer?
Bankruptcy court filings are available to the public for review and evaluation. You can call the court to request documents in the bankruptcy case.
If the distribution that CRG receives from the Debtor is less than the purchase price that CRG paid me, will CRG demand a refund?
No, CRG accepts the risk that the recovery amount is less than what we pay you for your claim. CRG is only entitled to a refund if the face amount of the claim you sold us is reduced, impaired or expunged by the bankruptcy court or for breach of certain representations as detailed in the Claim Purchase Agreement.
Does CRG have any requirements for the sale of our claim?
CRG requires that you have a valid claim that has not been previously sold, objected to, or satisfied. We recommend that you check your records carefully prior to accepting our offer. CRG reserves the right to review the validity of any claim and may refuse to purchase your claim for any reason.
Do I need to file a Proof of Claim form?
If you are a creditor in a Chapter 11 bankruptcy case, you may be required to file a Proof of Claim in the bankruptcy court in order to validate your claim against the Debtor. CRG highly recommends companies file a Proof of Claim to help with the claims reconciliation process. If you are a creditor in a Chapter 7 bankruptcy case, you need to file a proof of claim.
What else will we have to do to transfer our claim to CRG?
Once CRG receives the complete executed documentation, CRG will file the Notice of Transfer of Claim form with the bankruptcy court and no further action to transfer the claim will be required on your part. CRG’s Claims Purchase Agreement does, however, require that you forward any communications that you receive regarding the bankruptcy throughout the case to CRG.
Is CRG affiliated with or hired by the Debtor? Is CRG affiliated with the bankruptcy court?
No. CRG is an independent investment firm and is not related in any way to the Debtor or the bankruptcy court.
What types of bankruptcy claims does CRG buy?
CRG purchases trade receivables, mechanics liens, lease and executory contract claims, secured and unsecured loans and other types of debt from suppliers, landlords, lenders and other creditors in Chapter 7 and 11 bankruptcy cases.
In which bankruptcy cases is CRG buying claims today?
CRG purchases claims in a number of bankruptcy cases. Please call for specific details.
If I decide to sell, what should I do next?
Please call today to discuss your options.