I am considering buying the business assets (not the company) from a friend who is in Chapter 11 both as a corporation and personally. The commercial real estate is owned personally by my friend, not by her company, so her bank has sued her personally as well as her company. The goal is to lease the real estate properties to third parties, creating cash flow; and to consolidate the business to its primary location, which is leased not owned. My credit is not great, and the bank has asked that my friend cosign the loan. Here's the deal: by buying the assets of the company and the real estate this will put my friend in a situation where she can convert to a Chapter 7(?) both corporately and personally to avoid having to pay judgements against her from unsecured creditors. So, my question is this:
What will my bank do if my cosigner files Chapter 7?