The “Coronavirus Aid, Relief and Economic Security Act” (CARES Act) includes bankruptcy-specific provisions that provide enhanced relief for individuals and businesses that have been negatively impacted by the coronavirus outbreak.
As American individuals, employers, and governments are implementing various restrictions from social distancing to quarantines to reduce the rate of new COVID-19 infections, each of these decisions results in an increasingly negative impact on the American economy. Even with the recent financial aid package passed by Congress, with greater credit constraints and a heightened sensitivity to weak consumer demand, small businesses are among those hit the hardest by COVID-19 restrictions.
The Australian Federal Court has made orders relieving the administrators of retailer Colette from personal liability for rent in response to the COVID-19 crisis and the current uncertainty in respect of government policy about rent relief for tenants: see
What you need to know
Last week, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, implementing broad relief for individuals and businesses affected by COVID-19. One of the sections of the CARES Act receiving less attention is a temporary amendment to the Bankruptcy Code to provide streamlined reorganization procedures for businesses with debt of less than $7.5 million.
The extent and breadth of changes brought to the United States, and indeed, the world, by COVID-19 will probably not be fully understood for a long time. There are, however, several legislative changes made in recent days that are likely to have an immediate impact on small businesses. One that should be important for those advising small businesses in economic crisis are the amendments to The Small Business Reorganization Act of 2019 (H.R.
No one can yet predict the overall effect the COVID-19 pandemic will have on the economy in the long run. However, the immediate impact on small businesses seems readily apparent. The dramatic disruption has impeded cash flow and upset daily operations to the point that some business owners question whether recovery is possible.
Should a business find themselves in that unfortunate position, there is relief available under Chapter 11 of the Bankruptcy Code, but the Chapter 11 process can be unwieldy and expensive for small or even medium-sized businesses.
On Friday March 27, 2020, President Trump signed into law the third major piece of coronavirus-related legislation in the last several weeks – the Coronavirus Aid, Relief, and Economic Security Act (CARES). The new law contains several amendments to the Bankruptcy Code.
In 2019, the increased wave of distressed health care companies continued, and with downward pressure on reimbursement rates, regulatory changes, decreased occupancy rates and technological advances, this trend is unlikely to subside in 2020.
Health care providers often are heavily dependent on revenues from government programs such as Medicare and Medicaid, accounting for nearly 40% of national health care spending in 2018. Therefore, a Medicare payment suspension could cripple a health care provider.
On March 27, 2020, the President signed into law the historic Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “Act”), a $2.2 trillion stimulus package designed to mitigate the widespread economic effects of the novel coronavirus (“COVID-19”). The Act includes several temporary modifications to chapter 7 and chapter 13 of the U.S. Bankruptcy Code.[1] This alert details these modifications as follows:
Certain Federal Payments Excluded From Definition of “Income”
On March 27, 2020, President Donald J. Trump signed a $2 trillion stimulus package in response to the unprecedented chilling impact of COVID-19 on the U.S. economy. With the goal of providing widespread economic relief to an economy which unexpectedly has ground to a halt, the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) temporarily provides greater access to bankruptcy relief for small businesses.