Apr. 1, 2021

PRESIDENT BIDEN SIGNS INTO LAW A COVID-19 BANKRUPTCY EXTENSION ACT

On Saturday, March 27, 2021, President Joe Biden signed into law the "COVID-19 Bankruptcy Relief Extension Act" which, among other things, extends provisions providing financially distressed consumers and small businesses an expeditious and economical procedure for bankruptcy relief.

In March of last year, unrelated to the coronavirus situation, a new subchapter of Chapter 11 became effective which provided for a speedy and less expensive reorganization process for small businesses. Initially, a small business was defined as a business entity that had collective debts of less than $2,725,625. As a result of the pandemic, later in the year, Congress expanded the availability of the law to businesses with debts no greater than $7.5 million. This $7.5 million limitation was set to expire on March 31, and the bill that was signed on March 27 extended the expanded debt limitation of $7.5 million until March 27, 2022.

This is significant for our lender, landlord and creditor clients in that new strategies have to be considered when dealing with borrowers, tenants and customers who are experiencing financial difficulties. The new Subchapter V to Chapter 11 allows, in some circumstances, the modification of creditor claims even over the objection of all secured and unsecured creditors, as well as allowing home mortgages used as collateral for business loans to be "stripped down". Furthermore, leases and executory contracts may be fully modified or rejected, and the rights and remedies of creditors severely restricted.

Likewise, for our clients that are small businesses (which includes individuals as well as entities) that do not exceed $7.5 million debt limit, the small business provisions of the Bankruptcy Code provide a valuable tool for an inexpensive reorganization if needed. Additionally, the threat of the filing of a small business bankruptcy proceeding can be used as a tool in negotiating with lenders, landlords and other creditors. The small business subchapter allows a qualifying individual or entity to reorganize its unsecured debt by the payment of net disposable income over an up to a five year period in order to satisfy all unsecured debt obligations. The new changes also provide that in defining "income", coronavirus-related payments from the Federal Government will not be treated as income for the purposes of filing bankruptcy. 

Any member of the Tripp Scott creditors' rights and bankruptcy practice group will be pleased to provide our friends and clients with additional information on request.

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Sen. Marco Rubio Appoints Tripp Scott's Ed Pozzuoli to the Southern District Judicial Advisory Commission (JAC)

FORT LAUDERDALE, Fla., April 30, 2021 – Tripp Scott today announced that Ed Pozzuoli, CEO of Tripp Scott, was appointed by Sen. Marco Rubio to the Southern District Judicial Advisory Commission (JAC) for the 117th Congress.

PRESIDENT BIDEN SIGNS INTO LAW A COVID-19 BANKRUPTCY EXTENSION ACT

On Saturday, March 27, 2021, President Joe Biden signed into law the "COVID-19 Bankruptcy Relief Extension Act" which, among other things, extends provisions providing financially distressed consumers and small businesses an expeditious and economical procedure for bankruptcy relief.

Legal Creativity Helps Overcome Business Obstacles

As Published in Florida Trend

Earlier this year, a client was scheduled to close on a commercial condominium they were selling. Certain documents had been sent to recording in order to allow the closing to take place; the buyer insisted that they could be viewed on the public records before he would close. Time was tight and events were not in our client’s favor. The coronavirus had reduced the recording office's staff, making it impossible to know when the documents would be viewable online.

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