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Highlights The U.S. Small Business Administration's (SBA) official form in effect since April 3, 2020, and its more recent interim final rules prohibit a debtor in bankruptcy that otherwise qualifies from being granted a loan under the Coronavirus Aid, Relief and Economic Security Act's (CARES Act) Paycheck Protection Program (PPP). In response, debtors in cases pending in bankruptcy courts around the country have commenced proceedings to enjoin the SBA and lenders working with it from [...]

When a customer becomes a debtor in bankruptcy, your first act should be to take all necessary steps to avoid violating the automatic stay imposed by the United States Bankruptcy Code.  The automatic stay is interpreted broadly, but, in short, you and anyone acting on your behalf must suspend all collection activity, including lawsuits, collection calls, billing, etc., unless and until the Bankruptcy Court orders otherwise. You will then want to go back and examine [...]

We previously informed you that if you are a small business that needed to file bankruptcy to save your company, then you may be able to take advantage of Subchapter V of Chapter 11 of the Bankruptcy Code.  The new subsection, which took effect in February, creates a more streamlined and less expensive Chapter 11 reorganization path for small business debtors.  The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which passed the United States [...]