Replies to post #6737 on SandRidge Energy, Inc. (fka SDOCQ)

[Smilin_B]

You are 100% incorrect.

Any "attorney" will NOT tell u to max out your credit cards if you are planning to file bankruptcy, in much the same way that any attorney will NOT tell you to pay off certain creditors and not others, when contemplating bankruptcy. If and when a bankruptcy filing is conducted (by anyone) a bankruptcy judge will conduct a substantial audit of the preceding months and in many cases, years worth of transactions prior to the filing being granted.

In the case of Sandridge Energy, their most recent drawdown of credit, was scrutinized by their lender and the lender would not have authorized a continued drawdown if there were risks of bankruptcy looming. Some things are just common sense. I wish more people had access in utilizing it.

[notagain1]

Again this is all a matter of your opinion. I posted articles of current events and nowhere does it state that the company is filing BK. In fact they are preserving cash and stated that they: "continue to engage in constructive dialogue with stakeholders"

No special reading glasses here. Word for word.

[LouisDesyjr]

Actions taken prior to bankruptcy

While the attorney is usually not supported to 'plan it out' for a company, the attorney can most certainly advise the company what will happen if they do X or Y, etc. if asked.

They whole routine of 'drawing down all of the credit lines and not paying anymore for as long as possible' has been done so many times by so many companies; that everyone knows what to do and what is going on.

I am surprised that the banks don't shutoff the credit lines when a company is going down the drain. Even if the credit line is at the top of the asset classes in a coming bankruptcy, why get stuck in the middle of a bankruptcy mess that will take months and maybe years to sort out? Plus the bank runs the risk of DIP financing getting super priority and ahead of them in the classes.

Louis J. Desy jr.

[mikoli007]

Not true every BK attorney may tell you to stop making payments but they will NOT tell you to max out every line of credit.

Under federal bankruptcy law, credit obtained by "fraudulent means" can be deemed nondischargeable.

Is running up your credit cards right before you file bankruptcy considered to be "fraudulent means"? Yes, particularly if you do so for the sole purpose of getting what you can out of the credit card before wiping all the debt out in bankruptcy.

As an example, suppose you visit with a bankruptcy attorney and make the decision to file Chapter 7; then, knowing you won't have to pay it back, you go on a spending spree with your Visa card, because you're basically getting it all for free. You get to keep the stuff, but you don't have to pay back the debt because of the bankruptcy. This is obtaining credit by fraudulent means -- when you use your credit card, the credit card company is lending money based upon your promise to repay it, and using it knowing you will not repay it is fraud.