Coronavirus And The New Chapter 5 Bankruptcy
By OPLawSocialMedia on Coronavirus
Hi. This is Attorney Roy Oppenheim from the trenches. As most of you know, the past decade, we’re representing many homeowners who were in foreclosure during the last economic crisis, during the Great Recession. Unfortunately, it looks like we’re, as a nation, going to be dealing with another exogenous kind of shock to our economic system. The markets were at an all-time high just two, three weeks ago, and now, they’re in absolute turmoil. People are trying to figure out what’s gonna happen next, how they’re gonna be able to keep their job while their schools are closed, gonna try and figure out how to keep themselves safe, how to keep their parents safe in their nursing homes, how to get their money back from cruise lines that they were not gonna now go on.
And of course, businesses are gonna suffer dramatically from this too. If you have a supply line from China that you get your goods from or your component parts from and you won’t be able to sell. Or in the alternative, you sell into a market that typically is very tourist-oriented, you’re going to see major disappointments in your earnings. And in fact, if you’re a small business, you will probably need to consider bankruptcy at some point. In fact, today, there was an announcement that a small regional airline in London, in England, filed for bankruptcy. And we’re gonna see more and more that. Larger companies, maybe not the largest companies, they’ll consolidate, absorb the other companies, they may be able to absorb the brunt. But the small guy, the small little guy probably is gonna take it hard.
So it’s very interesting that the bankruptcy code recently, just in the last few weeks, changed where there’s something now called a Chapter 5. I said Chapter 5. I only ever heard of a Chapter 11, Chapter 7, and a 13, 11, 7, and 13. Guess what, there’s something now called a Chapter 5.
What is Chapter 5? Chapter 5 is for small businesses, small businesses that have less than $2.7 million in debt, they can reorganize and it’s streamlined, it’s cheaper, it’s more efficient, and yes, at our firm, along with the other law firms that we work with, the other attorneys that we work with, we’ll be helping companies try and figure out how they can use this new Chapter 5 to their advantage so they can stay in business.
That big thing is, of course, is not to wait til it’s too late, the idea is to do something. Pre-bankruptcy planning, like all the large Fortune 500 companies always do, and to come in early, and navigate these waters and figure this out. If you think this coronavirus is something that’s going to end, this corona pandemic… And by the way, the pandemic is more of folks creating pandemonium about a virus. Remember, guys, this is a virus. It may be a different kind of virus and we may not have a vaccine, but it’s a virus, and we can deal with a virus. In fact, in Florida, and we’ll talk about this in another video, it’s going to be in very good shape over 80, 85 degrees, this virus does not like the sun, does not like the sun, for the same reasons we like the sun. And so we’re gonna be good shape long term. But short term, we all have to figure out how to survive and how to maintain our business.
Chapter 5 for small businesses. You should call us, talk to us, and we should get going now, before it’s too late for you to save your business. Roy Oppenheim from the trenches. Thank you.