Vulture Capital You can't beat the big creditors to the bones of a bankrupt client, so what do you do?

Before September 11, Le Gourmet Gift Basket Inc. was growing at a healthyclip. But in the months that followed the attacks, with steep dropsin the stock market and mounting layoffs, many of its would-becustomers began welshing on their contracts and bouncing checks.Five of them went bankrupt in a 10-month period. "I'venever seen anything like it," says Cynthia McKay, 47,president and CEO of the Denver-based franchise.

McKay stood in line with the other creditors but was mostlyunsuccessful in her efforts to recoup her investments. Althoughthere might be some indication of a problem beforehand, she says,often "you don't know 'til you get that littlepostcard [from bankruptcy court]."

Thanks to the continuing dismal economic climate, bankruptcyannouncements have been darkening the mailboxes of more and moreentrepreneurs. So what do you do if you find one in yours? Afterreading the carefully underlined dates and deadlines for claimsfilings, consult a bankruptcy attorney. One of the many ways alawyer can help is advising whether you should continue supplyingthe customer. If losing the account could bankrupt you, it mightnot be a bad idea to continue, at least temporarily, says HowardEhrenberg, a bankruptcy specialist and partner with Sulmeyer,Kupetz, Baumann & Rothman, based in Los Angeles. "Thebankruptcy code protects vendors who continue to provide goods andservices after the bankruptcy is filed by giving them the highestpriority," says Ehrenberg.