Among the only certainties for the post-COVID lending world is the uncertainty of commercial real estate values. Among the classes of real estate that surely will be immediately diminished in value are hospitality and most brick and mortar retail, but even the value of industrial and office properties will be closely scrutinized as questions are posed regarding changes in how companies conduct their businesses and which types of businesses will recover most fully.
The current COVID-19 pandemic is causing an unprecedented negative impact on businesses around the globe in nearly every sector of the economy. Both the US Government as well as Foreign Governments have and will continue to provide short- and long-term financial support to these businesses. However, this financial assistance will not be available to every business, nor will it be adequate in all instances to offset decreased revenue resulting directly and indirectly from the pandemic.
The novel coronavirus COVID-19 pandemic has the potential to impact the U.S. economy at a level which could ultimately rival or surpass the global financial crisis of 2009. Reports from commercial landlords suggest that a majority of retail and restaurant tenants, perhaps as many as 75%, failed to make payments of rent due on April 1st.
On March 25, 2020, the Senate passed an amendment to H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (as amended, the “CARES Act”), which (as of March 26, 2020) is being considered in the House.
The complete text of the current draft of the CARES Act can be found here.
Early last week the online auctioneer Paddle 8 filed for Chapter 11 bankruptcy in the Southern District of New York, on the heels of a recent lawsuit demanding payment for works of art sold at a charitable auction last November.
“Only when the tide goes out do you discover who’s been swimming naked” – Warren Buffet
The tide has gone out on the municipal finance market.
While much of the discussion about the financial fall-out of the COVID-19 virus has focused on the massive wealth destruction in stock markets and pressure on corporates around the world, the impact on the largest financial market in the world- the $3 trillion US municipal finance market- cannot be ignored. Simply put, the market is imploding.
The United States Court of Appeals for the Seventh Circuit held that payments made by a debtor’s customers to its lender converting a pre-petition loan to a post-petition loan constituted disbursements for the purposes of calculating the statutory fees payable pursuant to 28 U.S.C. 1930(a)(6). In re Cranberry Growers Coop., 2019 U.S. App. LEXIS 21121 (7th Cir. July 17, 2019). This decision, coupled with the increase in the quarterly fees for the U.S.
Article 55 of the Bank Recovery and Resolution Directive (BRRD) (2014/59/EU) requires Member States to ensure that a bail-in clause is included in agreements containing liabilities of a regulated Member State financial institution which are governed by the law of a third country.
On January 9, 2019, California Attorney General Xavier Becerra filed a motion with the U.S.
On Friday, October 26, 2018, the U.S. Supreme Court granted certiorari in what could be a landmark decision concerning trademark issues in bankruptcy. In Mission Product Holdings, Inc. v. Tempnology LLC, the Court will resolve a Circuit Court split and determine whether a debtor-licensor can strip away the rights of its trademark licensees by rejecting its trademark licensing agreements as part of its bankruptcy case.