As noted in our prior Alerts, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which became law March 27, 2020, included various COVID-19 pandemic-related bankruptcy relief provisions which sunsetted on Saturday, March 27, 2021, but were extended by the “COVID-19 Bankruptcy Relief Extension Act of 2021” (“2021 Extension Act”) through March 27, 2022. By the President’s June 21, 2022, signature of the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “BTATC Act”), Pub. L. No. 117-151, ___ Stat.
Credit risk issues permeate supply chain relationships in both directions. Current circumstances seem to exacerbate these considerations as the supply chain and pervasive pandemic effects continue to impact all sectors at all levels. The following outline identifies some potential problems and possible solutions related to selling to and buying from companies that are insolvent, or in danger of becoming so.
THE GAMES
With Customers: Should you sell on a secured or unsecured basis?
As noted recently by some United States Bankruptcy Courts, effective December 1, 2021, the Director of the Administrative Office of the United States Courts (the “AO”) has designated any entity that receives 100 or more paper bankruptcy notices in a single calendar month as a high-volume paper notice recipient pursuant to Fed. R. Bankr. P. 9036(b)(2)(B) (as amended effective December 1, 2021) (the “Rule”).
As noted in prior Alerts, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) which became law March 27, 2020, included various COVID-19 pandemic-related bankruptcy relief provisions which were set to sunset on Saturday, March 27, 2021. Due to quick Congressional and Presidential action last week, on Saturday, March 27, 2021, the President signed the “COVID-19 Bankruptcy Relief Extension Act of 2021” (“2021 Extension Act”).
On January 14, 2021, the Supreme Court of the United States resolved a circuit split by unanimously holding that the “mere retention of property” by a creditor after the time a debtor files its bankruptcy petition does not violate the automatic stay under § 362(a)(3) of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. (“Bankruptcy Code”). In City of Chicago v.
As the economic fallout from the COVID-19 pandemic continues to rise – for example, J. Crew recently filed bankruptcy, and the financial press is predicting that Neiman Marcus may also file for relief this week – it seems prudent for secured lenders to consider what steps they can take to prepare for what may prove to be a tidal wave of bankruptcy filings this year.
“My hospital filed bankruptcy - now what do I do?” This question frequently confronts affected medical providers when faced with the strange and often bewildering new world ushered-in by a hospital bankruptcy. A recent Washington Post article noted that due to the COVID-19 pandemic, “the health-care industry is suffering a historic collapse in business that is emerging as one of the most powerful forces hurting the U.S.
Congress passed the long-awaited Consolidated Appropriations Act, 2021 (“CAA”) December 22, 2020, which now is awaiting the President’s signature to become law. The CAA contains several COVID-19-related amendments to the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. (“Bankruptcy Code”), which may affect creditors. The CAA’s “Bankruptcy Relief” amendments are set forth in Title X of the Act. Those amendments of greatest interest to creditors are:
On March 25, 2020, the United States Senate – and on March 27, 2020, the United States House of Representatives – passed the “Coronavirus Aid, Relief and Economic Security Act” (“CARES Act”) to provide relief to small businesses and consumers harmed by the COVID-19 pandemic. The CARES Act is expansive in its scope, but there are important provisions lenders should know about that are related to bankruptcy.
In Whirlpool Corp. v. Wells Fargo Bank, National Association (In re hhgregg, Inc.), (7th Cir. Feb. 11. 2020), the United States Court of Appeals for the Seventh Circuit held that the current enactment of the United States Bankruptcy Code (the “Bankruptcy Code”), specifically 11 U.S.C. §546(c), expressly subordinates a seller’s reclamation claim to the prior rights of a lienholder. This is good news for secured lenders.