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A number of legislative modifications were made to the Bankruptcy Code to reduce the economic impact of the COVID-19 pandemic on distressed debtors, particularly small business and individual debtors. While a few of these changes expanded protections previously granted to small business debtors pre-pandemic, a major pandemic relief program, the Paycheck Protection Program (PPP) was not made available to debtors in bankruptcy proceedings. After Congress established the PPP in The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), enacted on March 27, 2020, a number of debtors in pending bankruptcy cases applied for PPP loans. The Small Business Administration (SBA) opposed PPP loans for debtors, and courts were split as to whether the SBA could block debtors from qualifying for and receiving PPP loans. Two circuit courts, the Eleventh and the Fifth Circuits, ultimately ruled against the debtors. USF Federal Credit Union v. Gateway Radiology Consultants, P.A., No. 20-13462 at 43 (11th Cir. 2020) (holding that the SBA did not exceed its authority in adopting the non-bankruptcy rule for PPP eligibility).
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By Jonathan P. Friedland, Mark Melickian & Hajar Jouglaf
A large number of reported decisions interpreting Sub V have mostly addressed the eligibility threshold for a debtor to proceed under the new law. And legitimate questions will continue to present themselves. Such is the nature of most new (and even not-so-new) statutes.
By Wendy Johnson Lario, Alan Brody and Scott Humphreys
This article addresses some of the relevant employment laws and litigation vulnerabilities that companies, including their owners, officers and directors, should consider before ceasing operations or filing for bankruptcy.
By Melissa Davis and Grace E. Robson
This article focuses on the basics of fraudulent transfer claims and solvency analysis in the context of lawsuits where a plaintiff is seeking to recover payments made prior to the bankruptcy case being commenced, sometimes referred to as “claw back” litigation.
By Daniel Coyle
Chapter 15 specifically allows foreign representatives to conduct discovery in the U.S., but be wary of other entities that seek to distract and/or delay the Foreign Representative from the asset search.