Introduction

Debtors in bankruptcy, including hospitals and skilled nursing facilities, left out under the CARES Act PPP

Operating a consumer finance company in normal times is no simple process—in the on-going pandemic, it is even tougher.  

This may be a good time to step back a minute to examine the most common mistakes that we see made by finance companies.  I offer the following for your consideration:  

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:

The global COVID-19 pandemic has created uncertainty around the planned deal-making activities of many middle market private equity funds. However, this environment also creates significant opportunity to provide investment and financing to companies that find themselves in distressed circumstances.

Background

On March 31, 2020, the Rhode Island Superior Court announced the creation of its COVID-19 Receivership Program. The Program establishes a unique non-liquidating receivership calendar intended to assist Rhode Island businesses that are unable to pay their debts as they become due as a result of the coronavirus pandemic. The Program is designed to give struggling businesses time to obtain emergency funding under the CARES Act or other source, to resume paying its ongoing obligations under Court supervision, and repay its prepetition debt.