Yes, but only if it is done carefully.
All three of these options are procedures intended to secure the most money from the sale for the payment of creditors, and to leave the Seller creditor with no post-closing liability, but the procedure is not set up to provide a Buyer the most protection. However, if you proceed carefully, you can secure the major protections you need, in most circumstances.
Compare these procedures. In a normal contractual sale, a Buyer usually has the following protections:
In what appears to be more good news for those with student loan debt, the Tenth Circuit recently joined the Fifth Circuit by holding that certain private student loans are dischargeable in bankruptcy.
In McDaniel v. Navient Solutions, LLC, No. 18-1445 (10th Cir. Aug. 31, 2020), the Tenth Circuit held that an educational loan does not constitute “an obligation to repay funds received as an educational benefit” under Section 523(a)(8)(A)(ii) of the Bankruptcy Code.
Section 523(a)(8) of the Code provides, in pertinent part:
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Small Business Reorganization Act of 2019 (SBRA) provide useful options for small business debtors (i.e. those whose debts are less than $7.5 million) considering Chapter 11 bankruptcy protection. However, to reap the benefits of these Acts, small business debtors may need to act quickly, as some of the key benefits of the CARES Act are scheduled to sunset on March 27, 2021.
Following Wednesday night’s late-night Senate passage of the Coronavirus Aid, Relief and Economic Security (CARES Act), the bill was sent to the House of Representatives. The House will convene Friday morning at 9:00 a.m. to begin consideration of the CARES Act (H.R. 748).
The CARES Act expands earlier versions of two pieces of legislation to help individuals and businesses harmed by the COVID-19 pandemic.
On August 23, 2019, Congress passed, and the President signed into law, Public Law 116-54 known as the “Small Business Reorganization Act of 2019” or “SBRA.” It takes effect on February 19, 2020. The SBRA adds a provision (namely subchapter V) to Chapter 11 of the U.S. Bankruptcy Code to make the reorganization process less complicated, and thus less expensive, for small businesses. The Act generally defines a small business as a debtor with less than approximately $2.7 Million of secured and unsecured debt.
The U.S. Supreme Court set new precedent on January 14, 2020 when it decided that a ruling from a bankruptcy court enforcing a Chapter 11 automatic stay is a final order that must be appealed within 14 days as set forth in the Federal Rules of Bankruptcy Procedure.
On August 1, 2019, the U.S. Senate passed the “Family Farmer Relief Act of 2019” (H.R. 2336), bipartisan legislation which cleared the U.S. House of Representatives in June. The President is expected to sign the Act into law, and it would go into effect on the date it is signed. The Family Farmer Relief Act of 2019 significantly increases the “debt limit” for agricultural producers seeking to reorganize under Chapter 12 of the U.S.
Every week the news reports another national chain of retailers announcing bankruptcy, downsizing, or other restructuring. What started as a drip, has become a flood, and the surge is so strong that it must make shopping center owners, and potential developers, rethink what a shopping center can be in the future.
On May 20, 2019, an 8-1 majority of the United States Supreme Court held that a bankruptcy debtor’s rejection of a trademark license agreement does not constitute a rescission of the license under the Bankruptcy Code. This resolved a split among federal circuit courts previously addressing the issue. Mission Product Holdings, Inc. v. Tempnology, LLC, No. 17-1657 (May 20, 2019).
Every week another national chain of retailers is announcing bankruptcy, downsizing, or other restructuring. What started as a drip has become a flood, and the surge is so strong that it must make shopping center owners, and their lenders, rethink what a shopping center can be in the future.