JC--
I don't know what industry you're in, but if it's anything in the building materials or construction industry, then you could file preliminary lien notices on any jobs, which is available with or without a bankruptcy. Assuming you aren't in materials or construction, and you've already stated you're looking for other solutions than UCC's, I have a couple of suggestions.
You will first of all need to get the customer's post-bankruptcy financials, so that you have an opportunity to determine whether they are likely to exit bankruptcy successfully. If you accept personal guaranties from management, insist upon personal financials from the guarantors. Determine also whether there are any unencumbered assets (unlikely, but still ask) that could guaranty your post-petition sales.
It's likely there will be objections to your requests for information from the debtor; that's not unusual. Explain to them that, because they are in bankruptcy, regardless of what they owe pre-petition, the post-petition entity is effectively a new company, and must prove its creditworthiness in order to qualify for terms. Also tell them you are willing to work with them, but in order to fulfill your fiduciary duties, you must be able to provide sufficient support for extending credit.
If you do extend terms, be explicit with the customer about the terms, and don't let them exceed the terms. If they go over limit, or out beyond whatever terms you have negotiated, suspend their purchase (not just credit) privileges until they are back in compliance. COD sales while they are on post-petition credit hold doesn't make things any better than they likely were before their bankruptcy. If they exceed terms, and are cut off immediately, you can use the "ordinary course of business" defense if any preference actions arise.
Another thing to request is relief from preference actions in the current bankruptcy, as part of any agreement to continue selling post-petition, or ask to be listed as a "key vendor". A Key Vendor is a firm that is assumed or proven to be vital to the ongoing operations and survival of the bankrupt firm, and so enjoys certain privileges so long as they continue their business relationship with the debtor.
There is a rule I recently heard, regarding bankruptcy filings. It is rendered as:
"7 (0-5%) vs. 11 (85-90%)"
What the first part means that the likely distribution available to non-secured creditors is 0-5%. The second part means that 85-90% of all Chapter 11's convert to Chapter 7's at some point.
Your customers may all be exceptions to the above, but you should prepare for the great likelihood that most are not.
Hope this helps.
