The global COVID-19 pandemic continues to wreak havoc on the U.S. economy. Stay at Home orders issued by governors in all but a handful of states required, with certain exceptions, closure of all but those businesses deemed to be “essential.” While Congress has passed a series of measures meant to stem and mitigate financial impacts, a very large percentage of American small businesses will struggle to survive as states, counties and cities slowly lift restrictions and permit businesses to reopen.

Capital intensive businesses often raise capital from multiple sources, including loans from senior and subordinated lenders and hybrid financing – most typically loans accompanied by warrants – from so-called mezzanine lenders. A borrower’s cost of funds with respect to each depends on the quantum of risk associated with the particular credit. Senior lenders enjoy priority in payment and recourse to discernible collateral and are able to offer lower interest rates and lower fees.

Brick and mortar retail businesses, including restaurants, have faced especially difficult challenges during COVID-19. Under the various stay-at-home and shelter-in-place orders that have been issued by state governors, retail stores had no choice but to close for weeks or months. Stores that have been able to reopen are operating at limited capacity due to social distancing guidelines. With either no sales or greatly reduced sales, retail companies have had trouble generating enough revenue to pay rent and many have had to close permanently.

In Ritzen Group, Inc. v. Jackson Masonry, LLC, 589 U.S. ___ (Jan. 14, 2020), the Supreme Court (the Court) agreed with the majority of circuit courts and unanimously held that an order unreservedly, that is, without prejudice or condition, adjudicating relief from the automatic stay of 11 U.S.C. § 362(a) is final and any appeal must be filed within the 14 day period under Rule 8002.