Asked in Bankruptcy for Texas

Q: Do I assume any risk if I represent my company in a bankruptcy final hearing? -- I am a staff level employee.

I have recently been asked by our CFO and CEO to represent the company at our final hearing for Chapter 11 Bankruptcy. In this hearing we will present our bankruptcy plan to the Judge for his final approval.

Our CFO is on vacation in Europe and will not be able to attend. I was asked to fill his role in the meeting. --- I am currently 24 years old and a staff level employee who will not be with the company in the next few months.

Does my role in the hearing leave me at risk if anything is to go wring with the plan during the bankruptcy? Will I be asked to sign any documents that I can be held accountable for in the future?

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2 Lawyer Answers
Timothy Denison
Timothy Denison
  • Bankruptcy Lawyer
  • Louisville, KY

A: You can represent the company at the hearing if so designated by the company powers that be, however, if you are not a lawyer you will also need one with you. Do not sign anything that the CEO or CFO has not specifically approved.

W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA

A: You are wise to seek legal advice prior to your impending testimony.

It is also wise to have counsel appear with you at any hearing in court, although it seems from your brief report of facts that it will be counsel for the debtor corporation who will appear with you, so his loyalty is to the debtor, not to you personally.

Your primary risk is perjury. You will be sworn in prior to any testimony you offer, so whatever you say will be under oath. Do not "guess" in your testimony; and you should limit your testimony to what you have personally observed (not what some lawyer or company exec suggests that you say), to which you can add what you have seen in business records. You should, during the course of your testimony, identify the sources of the information about which you speak. A good lawyer will most probably (given your facts) buttress your testimony with company financial documents about which you testify.

You should also be prepared for questions from the Judge, as well as from counsel for other parties on cross-examination. Throughout the hearing, especially given that you will be terminating your relationship with the company in the near term, be guided by the admonition that you must confine your testimony to what you know, to the best of your knowledge, to be truthful.

All that said, this is also an important opportunity for you, at such a young age, to testify before a court. Your resume should include it in the future.

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