In this blog we talk about how leases and other executory contracts are handled in the SBRA reorganization process. First, some general principles. The law only applies to leases or executory contracts that are unexpired. If a tenant waits too long to get their bankruptcy case filed they could lose a number of valuable rights […]
In this building block blog we discuss what are known as preference payments and the rules for when these payments can be “clawed back” from the creditor who received them. Returned preference payments would then, in turn, be used to fund the reorganization plan. When must a payment be further analyzed to determine if it
In this building block blog we look at a very specific issue: what options does a tenant have to handle past-due rent in a reorganization plan? Breaking this down: what options does the tenant have under the SBRA? And, second, what options does the tenant have under state law? Let’s first look at options available
In this building block blog we look at one of the more radical changes that the SBRA makes to the law applicable to the reorganization of a business’s debts- the ability to modify the terms of any loan secured only by your personal residence. In the past, loans against personal residences were sacrosanct. Bright line
Let’s take a look at how the SBRA works in a situation of a hypothetical California restaurant owner with the following financial circumstances. In this blog, we do cover a lot of financial data quickly. Don’t worry about taking notes, the full text of this presentation can also be reviewed in the written blog section
Let’s take a look at how the SBRA works in a situation where a married restaurant owner doing business as a corporation has personally guaranteed the business debt. The owner has been a California resident for the last 20 years, his personal assets are a house with $250,000 in equity. $50,000 in a CD. A
All is not lost if you, a friend or relative signed personal guarantees on business equipment purchases, unsecured lines of credit or leases. First, the court can, and typically will, issue an order under section 105 of the code barring the creditor from pursuing the personal guarantor of the debt while the reorganization plan is
Personal Guarantees and the Small Business Reorganization Act. Read More »
When Congress passed the SBRA in the summer of 2019, the economy was humming along. Projections. Government. Legislatures. Business owners. They all thrive on projections. Baked into the SBRA were projections as to how many businesses would seek the benefits of the SBRA. When that number was estimated, Congress made the decision that the impact
Will Congress be forced to roll back the benefits provided in the SBRA? Read More »
In an August 3, 2020, letter to Congress, 100 top CEO’s, including the CEO’s at Microsoft, Google, Facebook, Starbucks, Merck, Salesforce, Mastercard and Walmart, put their names to a letter, and their reputations on the line, predicting “catastrophic” small business failure before years end if Congress does not act. “From retailers and restaurants to consulting