As inflation and interest rates rise, a recession is likely coming. A recession means more bankruptcy filings. Providers of goods and services often unknowingly find themselves embroiled in bankruptcy litigation if the provider received payment within 90 days of the customer’s bankruptcy filing. Such payments, called a preferential transfer, may later be challenged by the debtor customer or trustee. If successful, the provider of goods and services may be forced to return such payments to the bankruptcy estate.

“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.

The United States Bankruptcy Court for the District of New Mexico recently held that a federal credit union chartered under the Federal Credit Union Act, 12 U.S.C. §§ 1752, et seq., constitutes an “instrumentality of the United States” included in the definition of a “governmental unit” under the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. (“Bankruptcy Code”), qualifying federal credit unions for the longer 180-day deadline to file bankruptcy claims. In re Marquez, Case No. 19-10284-j7 (Bankr. D. N.M. Sept. 30, 2020).

The day any enterprise starts contemplating a bankruptcy filing never is a happy one. If the enterprise is in the health care industry, added anxiety can arise over whether it qualifies as a “health care business” under the United States Bankruptcy Code. Among other provisions applicable to a “health care business” in bankruptcy, the Bankruptcy Code requires the appointment of a patient care ombudsman (“PCO”) when a health care business becomes a debtor in a bankruptcy case.