Bankruptcy Amendments Could Help Businesses After Coronavirus
The coronavirus pandemic is spurring serious chain reactions on businesses and bankruptcies are inevitable. Although bankruptcy courts have already been granting extraordinary relief to delay sales and other transactions handicapped due to Covid-19, Proskauer Rose attorneys say the Bankruptcy Code should be changed to save more businesses from the pandemic’s fallout.
The coronavirus pandemic has a still unfolding and unprecedented global impact on daily lives, businesses, and economies. Most Americans are ordered to stay home. Scores of businesses are unable to operate while other businesses’ customers have no money to spend. Chain reactions await.
For instance, the restaurant or movie theater defaults on rent owed the landlord which then defaults on its mortgage payments. That syndrome triggers defaults of mortgage backed securities. Heightened market volatility pending the unknowable timing of therapies, vaccines, and public willingness to resume normalcy, renders a wave (or tsunami) of bankruptcies fairly inevitable. But ironically, at present, bankruptcy liquidation sales cannot even occur because no one is allowed to attend, except online.
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Bloomberg Law by Martin J. Bienenstock & Maja Zerjal. Published May 14, 2020.