Information for Creditors of Expo Marketing Group, LLC
Case Number 21-10668 in the United States Bankruptcy Court for the Central District of California
HISTORY OF EXPO MARKETING
Like so many other companies recently, ExpoMarketing filed for bankruptcy because of the COVID-19 pandemic. In 2019, Expo made over $9 million in gross revenue. In 2020, that number dropped to less than $3 million. The trend so far in 2021 is even worse.
Before the pandemic disrupted our lives, Expo Marketing ran a business helping companies to design and build booths that would best showcase their products or services at trade shows. Since the pandemic has seen most trade shows cancelled entirely, Expo has been unable to find work and sustain its business.
A large part of Expo’s business included taking deposits from customers. Now that it has filed for bankruptcy, many of Expo’s creditors are its former prospective customers who put down these deposits.
EXPO’S DEBT IS PRIMARILY UNSECURED
Expo Marketing has filed forms in the bankruptcy case called “Schedules” and the “Statement of Financial Affairs.” These forms give creditors information about the Debtor’s current financial position, including information about assets and liabilities.
In this case, the Debtor has reported that it has only around $266,000 in secured debt as compared to over $2,300,000 in unsecured debt. This is not a very common scenario in bankruptcy cases. The outsized amount of unsecured debt puts unsecured creditors in a strong bargaining position to try to steer the case in a way to provide the greatest return to creditors.
Unsecured creditors could be even more well positioned if they form what is known as a Committee of Unsecured Creditors. In Chapter 11 bankruptcy cases, Committees are formed to help small businesses and trade vendors get a better outcome without the financial toll that hiring individual counsel can bring. Committees can hire attorneys who are paid for by the Debtor, helping unsecured creditors achieve a more positive outcome.
EXPO MARKETING WILL LIKELY CLOSE
There is not very much information available in the Expo Marketing bankruptcy case yet. In fact, we have far more financial information than plans for the Debtor going forward. Still, experienced bankruptcy professionals are able to glean some information from what has been filed.
It looks like the Debtor intends to close its business. Expo reports that it has laid off several employees in the past year, has returned equipment it was leasing to the parties financing the equipment, and has made almost no money so far in 2021. These data points indicate that Expo does not intend to try to survive post-pandemic.
Given the probability that Expo will not reopen, it is likely that Expo is filing for bankruptcy to rid itself of its debt. Creditors will likely have to compete for any funds that may be available. One thing that a Committee can and should do is explore whether certain causes of action may exist that creditors can pursue to recover money for payment to all creditors. Bankruptcy laws allow Committees to conduct discovery and pursue certain causes of action, like fraudulent transfers and preferential transfers, if they exist. This may be creditors’ best, or possibly only, way to get repaid in this case.
PRLT does not represent Expo Marketing Group, LLC. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the Expo Marketing bankruptcy case or anything discussed on this page, please contact us.