WorldWide Drilling Resource

WorldWide Drilling Resource ® is proud to work in cooperation with to bring you more information about the benefits of geothermal drilling. 39 WorldWide Drilling Resource ® JUNE 2013 Drilling Into Money Not Boring by Mark E. Battersby Considering or Coping with Bankruptcy The good news, according to recent- ly released figures, is fewer of your drilling operation’s customers and suppliers are filing for bankruptcy. The bad news is how difficult - and expensive - it has become for any financially troubled drill- ing contractor and business to use bank- ruptcy as a tool for recovery. The federal bankruptcy laws have long provided a safe harbor for troubled drilling professionals to reorganize, refinance, and begin the turnaround to profitability free from pressure by their creditors. Today, recent changes to the bankruptcy laws have severely reduced this safe harbor while, at the same time, making it more difficult to deal with sup- pliers and customers in, or about to enter, bankruptcy. The two principal types of legal bankruptcy are Chapter 7, or involuntary, where one or more creditors petition to have a debtor judged insolvent by a court; and Chapter 11, or voluntary bankrupt- cy, when the debtor brings the petition. As in the past, the objective is an orderly and equitable settlement of obligations. Remember, corporations, limited lia- bility companies, and partnerships are legal entities separate from their share- holders or partners. They can seek bank- ruptcy protection in their own right. Sole proprietorships, however, are just an extension of their owner - they can’t file bankruptcy alone. Since the assets and liabilities of the business are really just one form of assets of the proprietor, the proprietor must file for bankruptcy. Would the drilling operation benefit from reorganization, or should it be liq- uidated? Reorganization can’t create a market, increase gross revenue, or make up for a poor fit between the skills avail- able and the skills required to operate the business. Generally, businesses requiring little capital, have few assets, or are merely extensions of the owner’s skills or per- sonality, and are ones it may not pay to reorganize. The owners may be better off liquidating the business - in or out of bankruptcy - and begin anew with a fresh entity. Bankruptcy "reform" is now a reality. Several years ago, Congress passed bankruptcy reform legislation in response to years of complaints from lending insti- tutions and creditors that too many finan- cially irresponsible people were abusing the bankruptcy laws, rather than honest- ly attempting to pay back their debts. Among those reforms were tougher rules every drilling business, troubled debtor, or cash-starved creditor, must contend with. Like it or not, bankruptcy remains an option and, all too often, a reality which must be dealt with. Mark Mark E. Battersby may be contacted via e-mail at admin@ worldwidedrillingresource.com PO Box 509 Crawfordsville, IN 47933 Flowcenter loop pump modules are avail- able for both residential and commercial ground-loop heating and cooling systems. Compatible with these pumps: B&G Grundfos Wi lo Flowcenters can be con- figured with 1, 2, 3, or 4 pump units to match different load requirements. Products include: Flowcenters Geothermal Closed-Loop Fittings Replacement Pumps Hose Kits and Accessories Variable Speed Pumps Phone: (866) 364-9460 Fax: (765) 364-9462 www.flowcenterproducts.com According to Energy Informat ion Administration and Environmental Protection Agency data, emissions of sulfur dioxide, nitrogen oxides, and particulate matter per kilowatt-hour from coal-fueled electricity generation have been reduced by nearly 90% over the period 1970-2011.