Attorney David Gibson Quoted in Blue Ridge Business Journal
Date: 02/23/2009
Contact: H. David Gibson - Partner
Phone: 540.983.9353
E-mail: david_gibson@gentrylocke.com
In the February 23, 2009 Blue Ridge Business Journal, Gentry Locke attorney David Gibson was quote in an article by writer Sarah Cox. To read the full article, click on the "Related Outside Link" below.
David Gibson with Gentry Locke Rakes & Moore says the economic climate has changed drastically; he, as an attorney who represents lenders and creditors, recognizes a ripple effect. "Lenders are less likely to lend, and in some cases don't have money to lend, and the lending requirements are becoming more stringent. From a lender's perspective, I try to counsel my clients to stay very aware of a borrower's financial condition and keep an open line of communication. If we start to see a problem, we try to work with them to minimize the loss, because once they go into Chapter 11 or Chapter 7, the lenders typically gets pennies on the dollar, and if they are an unsecured lender, they stand to lose a lot.''
Gibson says he suggests that his lenders get personal guarantees from borrowers because, he says, "they can bankrupt that business and essentially start a business the next day. And we are seeing businesses that are typically financially sound becoming concerned about their ability to meet financial needs." He adds that while these businesses are not going ahead and filing Chapter 11s, they are exploring options and asking lenders to modify financial arrangements, and they are working with their suppliers to extend the turnaround time on payment of invoices.
Be proactive, Gibson says to both his clients and their debtors. Don't wait. Be realistic about the economic situation. Don't let yourself be surprised about what the future may hold. "I have found that lenders and creditors, in this economic environment, are particularly willing to work with borrowers so that they don't go into bankruptcy,'' he adds.
Related Outside link:Read the full BRBJ article