The concept of a single purpose entity is often present in the purchase and financing of commercial real estate. A lender may require its borrower to be a single purpose entity in order to lessen the lender’s bankruptcy risk in the event that the borrower or any of its parent entities file for bankruptcy, and also to ensure that no other businesses of the borrower adversely affect the property that is the subject of the loan.
In the ten years before COVID-19, the national and global economy, along with business optimism, steadily improved. Some businesses, of course, failed as competitive pressures or mistaken assumptions led to missed projections, blown covenants, loan defaults, and financial restructuring, if not outright liquidation.
But a prudent ABL lender typically suffered little in a properly underwritten loan, even in a wind down. Receivables remained generally collectible, inventory readily converted into receivables, and machinery and equipment was salvageable at auction.
Here’s an aggregation of 60 of my Twitter posts from June 8-15, 2018, with links to important cases, articles, and news briefs that restructuring professionals will find of interest. Don’t hesitate to reach out and contact me to discuss any posts. Thanks for reading!
BK RELATED CASES:
On February 19, 2020, the Small Business Reorganization Act went into effect. The purpose of the new law is to offer an alternative, more streamlined path in chapter 11 reorganizations for small business debtors (including sole proprietorships). When the new law was passed, the only small business debtors eligible to file were those having less than $2,725,625 in debt, at least 50% of which arose from business activities. The Coronavirus Stimulus Bill changed that by increasing the limit to $7.5 million.
You run a small business. Your customer needs some extra time to get through a squeeze and you work with the customer to pay down the old balance over time. Suddenly, the customer files bankruptcy and two years later you get a demand letter from a contingent-fee lawyer representing a litigation trustee seeking 80% of everything the customer paid you in the 90 days before the bankruptcy filing.
Here’s an aggregation of 28 of my Twitter posts from the beginning of July 2018, with links to cases, articles, and news briefs that restructuring professionals should find of interest. Thanks for reading!
LIFE, BUSINESS, AND THE WORLD GENERALLY:
Here’s an aggregation of 26 of my Twitter posts from the first week of July 2018, with links to cases, articles, and news briefs that restructuring professionals should find of interest. Thanks for reading!
BK RELATED CASES:
Some more Sunday reading for you with an aggregation of 25 of my Twitter posts from mid-June 2018, with links to important cases, articles, and news briefs that restructuring professionals should find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!
BK RELATED CASES:
Here’s an aggregation of 28 of my Twitter posts from mid-June 2018, with links to important cases, articles, and news briefs that restructuring professionals should find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!
BK RELATED CASES:
Here’s an aggregation of 35 of my Twitter posts from June 16-18, 2018, with links to important cases, articles, and news briefs that restructuring professionals will find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!
BK RELATED CASES: