Overview

This article considers the state of the care homes industry, certain issues that arise when dealing with the imminent insolvency of care homes and initial considerations about what to take into account when determining sales strategy.

General concerns

Will your business be financially viable at the end of lockdown? What challenges does 2021 pose? What are the next steps

Despite vaccines now being available, tough measures remain in place to deal with the ongoing COVID-19 pandemic, creating uncertainties for businesses and owners about what the future holds.

Ongoing uncertainties about the COVID-19 pandemic, coupled with the looming deadline of Brexit, mean businesses and owners are in for a tough ride over the next few months, possibly much longer if the UK continues to face restrictions.

Courts struggled this year to find a balance between state-licensed cannabis activity and the federal right to seek bankruptcy protection under the Bankruptcy Code. During 2019, we had the first circuit-level opinion in the bankruptcy/cannabis space that appeared to open the door to bankruptcy courts, albeit slightly. We also had lower court opinions slamming that door shut. Below, we look at a few of the most important decisions issued throughout 2019 and analyze the current state of the law.

The Ninth Circuit Court of Appeals’ Garvin Decision

We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts. Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.

In prior posts, we examined whether state-licensed marijuana businesses, and those doing business with marijuana businesses, can seek relief under the Bankruptcy Code. As we noted, the Office of the United States Trustee (the “UST”) has taken the position that a marijuana business cannot seek bankruptcy relief because the business itself violates the Controlled Substances Act 21, U.S.C.

Slide Rules and Hula Hoops – Business Obsolescence and Bankruptcy

In Official Committee of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), 659 F.3d 282 (3d Cir. 2011), the Third Circuit Court of Appeals held, among other things, that the “deepening insolvency” cause of action, which the Third Circuit previously recognized in Official Committee of Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340 (3d Cir. 2001), remains an independent cause of action under Pennsylvania law.

Background

The Perishable Agricultural Commodities Act regulates transactions in fresh and frozen fruits and vegetables. It does this in part by creating a general trust for the benefit of produce sellers.