COVID-19: Restructuring & Insolvency Digest
During this challenging time, we know businesses are concerned about the impact of the coronavirus on the economy at large and on your business and investments. The State and Federal response to the business community’s concerns are changing hour by hour. The professionals of McManimon, Scotland & Baumann, LLC are here to walk you through the myriad and ever-changing governmental actions in response to the COVID-19 pandemic (executive orders, new laws, and other policies), and we are available to assist and guide you through the implementation of these actions and their impact on your near and long term operations.
The business community’s recovery from the economic impact of the COVID-19 pandemic will require professional guidance from experienced restructuring and insolvency professionals. Our attorneys [http://www.msbnj.com/practice-areas/restructuring-and-bankruptcy/] have represented all major constituencies in out-of-court workouts and debt restructurings, as well as in chapter 7 and chapter 11 bankruptcy cases, including debtors, trustees, official committees, secured and unsecured creditors, landlords, asset purchasers, insurance carriers, equity interests, governmental entities and other parties in interest. Our restructuring clients have included owners and developers of residential apartment buildings and commercial real estate; supermarkets and other retail stores; and owners and operators of restaurants, hotels, and other hospitality businesses.
In particular, small businesses may need the most assistance to weather the economic downturn. A new Federal law became effective on February 19, 2020, which is designed to specifically assist small businesses to reorganize in Chapter 11. The Small Business Recovery Act (SBRA) created new provisions in the Bankruptcy Code intended to make the restructuring of debts easier, faster, and less expensive. You can read more about the SBRA in this article by one of our attorneys: “What You Need to Know about the Small Business Reorganization Act (http://www.msbnj.com/articles/what-you-need-to-know-about-the-small-business-reorganization-act/) .”
More recently, the Coronavirus Aid, Relief and Economic Security Act (HR 748-116^th Congress), passed by the Senate on March 25, 2020, includes a provision to increase for one year the debt eligibility threshold for businesses filing under the SBRA, from $2,725,625 to $7,500,000. This will allow many more businesses to restructure more efficiently. In addition, on the State level, Executive Order 106 issued by the Governor this month immediately suspended foreclosure actions in the State, materially impacting the rights and remedies available to secured creditors and potentially creating an opportunity for borrowers to work out defaults.
The firm’s office systems make us well-prepared to operate remotely and to continue to provide clients with the same high level of assistance during this period of uncertainty. We have fully remote capabilities, and all attorneys and staff remain available by email, telephone, and fax.
Please call us if you need more information about debt workout and restructuring options that may be available to you; we will be here for you.