In response to the coronavirus (COVID-19) pandemic, many employers in various industries have been reducing hours and pay, or in many cases, closing their sites indefinitely. Employers can reference the article below for strategic ways to limit their liability when terminating or laying off employees during the coronavirus pandemic and contact Ice Miller LLP for additional information and assistance.

COVID-19 is taking an alarming and unfortunate toll on our country’s population. Each day, we collectively face daunting health risks, and the economic cost to individuals and businesses alike has already been, and will continue to be, staggering. Accordingly, more than at any point in the past decade, both debtors and creditors should consider the potential benefits of the bankruptcy process. This post discusses four basic bankruptcy concepts that always merit consideration, especially in these trying times.

In 2017, in Bristol-Myers Squibb Co. v. Superior Court,1 the Supreme Court of the United States held that, in federal cases involving multiple plaintiffs, each plaintiff must establish that the court has personal jurisdiction over each of its claims.2 This severely limited the forums where plaintiffs could bring multiple-plaintiff cases against defendants.

In the midst of the unprecedented global health challenge presented by the spread of the coronavirus (COVID-19), businesses will almost certainly face pervasive disruptions to operations as the economy experiences widespread financial distress. In light of the dramatic and continuing economic downturn, and with the certainty that almost every business sector has been or will be affected, it is imperative that each company have a plan for handling relationships with companies in financial distress.

In this type of market environment, one or more of the following scenarios may apply:

Bankruptcy can provide important advantages to companies considering M&A activity today. M&A purchases of bankrupt companies obviously often feature significantly depressed valuations and a small universe of potentially viable purchasers.

M&A activity that is part of the bankruptcy process will prioritize speed and efficiency, offering a number of potentially important benefits over the traditional merger process, including:

Surfant sur les tensions du marché mondial des produits de protection sanitaire et leurs composants, les escrocs développent les fraudes aux fournisseurs.

Ayant choisi leur interlocuteur et se faisant passer pour un fournisseur habituel de la société ou une société détenant ces produits ou composants sous tension, ils développent une stratégie fondée sur la rareté et l’urgence pour faire effectuer sans délai des virements pour sécuriser les contrats.

Les règles de prudence doivent être d’autant plus respectées :

As COVID-19 wreaks havoc on people around the world, it is also severely disrupting numerous companies’ health, balance sheets, and ability to survive. The impact is already manifesting itself as businesses temporarily suspend operations and furlough their employees as revenue is lost and expenses mount. It is inevitable that many of these companies, especially those that were already distressed prior to the COVID-19 crisis, will need to restructure their debts.

Restructuring Leases, Other Contracts, and Loans

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) went into effect. While coverage of the CARES Act has focused primarily on tax relief and provisions to extend loans and other forms of assistance to impacted businesses and individuals, the law also temporarily expanded eligibility for companies seeking bankruptcy protection under the recently enacted Small Business Reorganization Act of 2019 (“SBRA”).

Small businesses have traditionally had difficulties reorganizing under Chapter 11 of the Bankruptcy Code. The legal fees necessary to prepare a plan and disclosure statement and navigate the confirmation process were often prohibitively expensive. Further, the reporting requirements and United States Trustee fees mandated by Chapter 11 added significant expenses to the already struggling debtor’s cash flow.