On June 6, the United States Supreme Court decided Truck Insurance Exchange v. Kaiser Gypsum Co., Inc., No. 22-1079, holding that insurers with financial responsibility for bankruptcy claims are “parties in interest” under 11 U.S.C. § 1109(b) that “may raise and may appear and be heard on any issue” in a Chapter 11 bankruptcy case.

Both creditors and debtors need to know about unsecured creditors committees. These committees can help parties in a bankruptcy case, but they come with a cost. And most of the time, they’re appointed as a matter of course.

What is an unsecured creditors committee?

The unfortunate reality of the COVID-19 pandemic is that several businesses will not be able to survive this crisis. Legal experts agree that there will be an uptick in bankruptcy filings and Congress took note. The recently enacted CARES Act expanded access to the streamlined, small business Chapter 11 bankruptcy process to more businesses by increasing the debt limits from $2.7 million to $7.5 million for one year.

Can businesses obtain a Paycheck Protection Program (PPP) loan to fund their chapter 11 bankruptcy cases? This question has been looming over companies facing bankruptcy and in immediate need of financing. On April 15, the Small Business Administration (SBA) issued its answer.

Bankruptcy presents challenges for both landlords and tenants. However, tenants are often better protected during a bankruptcy case. And as some of the first big bankruptcy cases in the COVID-19 era show, protections for tenants could be expanding.

Tenants in bankruptcy have the following shields from lease obligations:

Forgiveness from termination provisions

Termination provisions in a lease cannot be enforced once tenants file for bankruptcy.

Freedom to assume and assign the lease

If you’re an unsecured creditor, it can be harder to get payment from a bankrupt debtor. But to have a chance of getting paid, you must file a proof of claim to assert your right to a distribution.

Bonding companies and debtors can learn an important lesson from the U.S. Bankruptcy Court for the Middle District of Louisiana’s recent opinion on how surety bond claims are treated once a bankruptcy plan is confirmed.

One question often asked of bankruptcy lawyers is, “what happens to my personal guarantee of business debt if my business files for bankruptcy?” Generally, the response has been that the guarantor is personally liable for a guarantee of the business debt. The creditor will seek repayment of the guarantee from the individual if the business files for bankruptcy or closes its doors.

The sudden fall of the oil market is already wreaking havoc on companies, and recent bankruptcy filings may be just the beginning.

The federal government made bankruptcy a viable option for small businesses with the passage of the Small Business Reorganization Act of 2019 (SBRA). The act, which became effective Feb. 19, is designed for smaller businesses that cannot afford the high administrative fees and costs associated with traditional Chapter 11 reorganizations.