We provide insight and analysis on complex issues affecting distressed businesses or funds throughout the United States and abroad. Our Bankruptcy team is available to speak on various bankruptcy issues and claims. Contact us to learn more.
Workout and bankruptcy professionals braced themselves for a wave of consumer and commercial bankruptcy filings because of the COVID-19 economic recession. Afterall, shuttered businesses led to the highest rates of job loss in recent memory. Business interruption and job loss usually result in bankruptcy filings. Instead, we saw a major drop in filings.
While there was no shortage of mega-bankruptcy filings last year, bankruptcy attorneys continue to scratch their heads at the absence of small-to-midsized corporate bankruptcy filings. There are several reasons for that absence. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) provided meaningful assistance to small business owners. In addition, economic stimulus checks provided some relief. Moratoriums were placed on federally guaranteed loans, and many states and cities halted evictions actions. With the change in administration, many are likely still trying to survive long enough for another round of stimulus.