Over the past four years, midstream firms have struggled to adapt their long-standing practices and adjust their long-held expectations, which were fundamentally disrupted by the outcome of the landmark bankruptcy case, In re Sabine Oil & Gas. Midstream providers have since developed and relied on certain mechanisms and carefully drafted contract language in order to bind upstream companies and their successors in interest to obligations and restrictions contained of midstream agreements.

In a case litigated by the authors, the United States Court of Appeals for the Seventh Circuit held in In re Marzieh Bastanipour, Case No. 20-1373 (7th Cir. June 10, 2020) that Chapter 13 debtors are not permitted in forma pauperis fee waivers absent a showing of extraordinary circumstances.

In 2018, the Debtor, Marzieh Bastanipour, filed a Chapter 13 bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of Illinois. This was the third Chapter 13 petition filed by the Debtor since 2013.

Force majeure clauses and the doctrines of impossibility and/or impracticability remain among the most-discussed legal topics of the COVID-19 pandemic. Courts across the country, finally open, are grappling with those issues and giving some insight as to how these topics may play out in future cases.

Seyfarth Synopsis: In acquiring a company in bankruptcy, there is often a tendency to think this guarantees the purchaser will be “free and clear” of any liability (including so-called “successor liability”). This is not necessarily so with wage and hour liability, particularly if the purchaser merely continues to operate virtually the same business that was acquired.

Courts continue to address constitutional and statutory challenges to COVID-19-related legislation and governmental orders. Among them, courts are examining eligibility for PPP loans under the CARES Act, as well as the constitutionality of “stay at home” and similar orders restricting activities.

PPP loans under the CARES Act

The COVID-19 pandemic and the drastic measures taken in an effort to mitigate its adverse impact have sent shock waves throughout the US and global financial systems. COVID-19 and measures including travel bans, shelter-in-place orders and widespread business closures have caused precipitous changes in customer spending and demand, supply chain disruptions, sharp declines in revenue and other operational challenges across a wide range of economic sectors. Businesses worldwide now confront unprecedented and mounting challenges and distress.

We have previously written about the effects of COVID-19 on the way we currently work, as well as how businesses need to adapt to protect their trade secrets, customer goodwill, and other interests. In ordinary times, emergency injunctive relief is often the first resort for a business after discovering its trade secrets were stolen or customer relationships are at risk.

On March 31, 2020, the Rhode Island Superior Court announced the creation of its COVID-19 Receivership Program. The Program establishes a unique non-liquidating receivership calendar intended to assist Rhode Island businesses that are unable to pay their debts as they become due as a result of the coronavirus pandemic. The Program is designed to give struggling businesses time to obtain emergency funding under the CARES Act or other source, to resume paying its ongoing obligations under Court supervision, and repay its prepetition debt.

During challenging economic times, Bankruptcy Courts serve an essential governmental and financial function. The COVID-19 outbreak has forced closures of businesses and governmental entities throughout the country, resulting in a cascade of financial distress across virtually every economic sector. The nation’s courts have not been immune from disruptions. Nearly all State Courts and Federal District Courts in major metropolitan areas have suspended non-emergency civil proceedings.

Seyfarth Synopsis: As OEMs confront the impact of the COVID-19 pandemic on an already changing automotive industry, one significant issue will be the inevitable financial challenges that many dealers will face. Financially distressed or, worse, bankrupt dealers, create serious issues for manufacturers and affiliated lenders, including negative publicity, dissatisfied customers, limited or shuttered operations, out-of-trust sales, and litigation.