The economic impact of the COVID-19 coronavirus remains uncertain, but many are preparing for an up-tick in bankruptcies and, in particular, 363 transactions – sales of assets pursuant to Section 363 of the US Bankruptcy Code. Here are some practical steps that can help you prepare for your own 363 process and finding your stalking horse.

The CARES Act includes actions specifically designed to provide various levels of temporary regulatory relief to financial institutions and to support the financial services industry as a whole. Following are the key areas in which the CARES Act provides relief to the financial services industry:

Up to $500 Billion in Emergency Liquidity for Eligible Businesses

Across the country, the COVID-19 pandemic has significantly impacted the justice system. In many State and Federal courts, jury trials have been suspended and court hearings are limited to only criminal and emergency civil matters. Yet the Bankruptcy Courts, given the unique role they play in times of financial distress, are largely open for business, relying on electronic filing and conducting hearings by teleconference.

Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act), providing a two trillion dollar economic stimulus for U.S. industries and citizens affected by the COVID-19 coronavirus. The legislation is expected to be signed into law shortly. Included in this legislation are provisions to provide financially distressed consumers and small businesses greater access to bankruptcy relief.

On March 26, 2020, the Senate approved a roughly $2 trillion stimulus package—the biggest economic stimulus in recent U.S. history—in response to the COVID-19 pandemic. This economic relief provides expanded protections for American families, workers, and businesses affected by the public health and economic crisis.

The key measures included in the package are:

The global coronavirus (COVID-19) crisis continues to have a devastating impact across all segments of the entertainment industry.

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.

Bankruptcy & Creditors’ Rights Alert

Small businesses often struggle to reorganize in bankruptcy. To address this issue, Congress passed the Small Business Reorganization Act of 2019. The act took effect in February 2020 and makes small business bankruptcies faster and less expensive. At the time of enactment, the act only applied to business debtors with secured and unsecured debts less than $2,725,625.

Boards of directors across the U.S. are currently wrestling with existential threats arising from the COVID-19 pandemic. In addition to the logistical and productivity challenges that come with decentralizing entire workforces, entire industries have seen unprecedented decreases in short term demand (or, increasingly, being subject to forced closures as “non-essential businesses”) piled on already-thin margins.

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.