The business, economic and financial fallout from the COVID-19 pandemic cannot be understated. While our families, friends, and clients are adjusting to these difficult, uncertain and stressful times – protecting our families, friends and communities from the spread of the virus, working from home, avoiding public spaces, and social distancing – businesses large and small are suffering from shutdowns, closures, breaks in supply chains, and the loss of business and revenue.

At a time when distressed situations will undoubtedly increase, it is logical, and reassuring, that Bankruptcy Courts will remain open for business in order to provide relief for troubled companies. The procedures may differ as many Bankruptcy Courts have implemented changes in order to address concerns raised by the potential spread of the virus. In this vital way, the Courts will continue to function uninterrupted.

Take for example the extremely active Delaware Bankruptcy Court. The Court entered an order confirming that all hearings, status conferences, trials, and other matters scheduled to be held in open court that are not time sensitive (as determined by the presiding judge on a case by case basis) will be postponed until after April 15, 2020.  Hearings which are necessary prior to April 15, 2020 will be held telephonically or by video conference. Everyone involved in any way in pending bankruptcy cases should assume that their matter is going forward, presumably telephonically, and should be prepared accordingly. The United States Trustee is conducting telephonic organizational meetings of creditors’ committees. (To track further COVID-19 updates from the Delaware Bankruptcy Court, visit: https://www.deb.uscourts.gov/covid-19)

A quick survey of some recently filed larger bankruptcy cases, such as Pier 1 Imports, Houlihan’s Restaurants, and Bluestem Brands, only reinforces this message of caution. Bar dates for the filing of proofs of claim are not being extended and are rapidly approaching. Many key hearings, such as those to approve the rejection of leases or to approve asset sales, are not being postponed. Deadlines imposed by the passage of time, such as objections to motions or answers to complaints, are not being continued to later dates. Failure to vigilantly monitor these cases and be prepared in real time to respond can have negative consequences.

As businesses and lenders adapt to this new normal caused by the COVID-19 global pandemic, bankruptcy cases will continue to be filed and work their way through the system. Bankruptcy courts across the country will use technology to continue to operate throughout these challenging times. If you are involved or become involved in a bankruptcy case, do not assume that the bankruptcy world will hesitate or stop – stay in constant contact with your professionals to protect and preserve all of your rights and remedies.

To sign up for e-mail updates from the NextGen Financial Services Report, Click Here.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Jonathan E. Aberman Jonathan E. Aberman

Jonathan E. Aberman leads the Chicago Bankruptcy, Insolvency & Creditors’ Rights practice and is a member of the Business Services, Corporate Finance and Financial Industries Groups.

Mr. Aberman’s national practice is committed to helping clients find creative, valuable and cost-effective solutions to complex…

Jonathan E. Aberman leads the Chicago Bankruptcy, Insolvency & Creditors’ Rights practice and is a member of the Business Services, Corporate Finance and Financial Industries Groups.

Mr. Aberman’s national practice is committed to helping clients find creative, valuable and cost-effective solutions to complex bankruptcy and insolvency-related problems, both in and out of court. He has helped businesses, banks and non-bank lenders, finance companies, special servicers and other secured and unsecured creditors protect their assets and interests in bankruptcy cases, workouts and restructurings, foreclosures, receiverships and assignments for the benefit of creditors. In addition, he regularly structures business deals and financial transactions with these situations in mind. He has also represented buyers and sellers of assets in the distressed marketplace, including Bankruptcy Code Section 363 sales and sales under Article 9 of the Uniform Commercial Code.

Photo of Mark A. Silverman Mark A. Silverman

Mark Silverman is a member in Dykema’s Chicago office practicing in the areas of business and financial services litigation. He is a member of the Firm’s Financial Services Litigation Group and a co-team leader of the Firm’s Commercial Mortgage-Backed Securities Special Servicer Group.

Mark Silverman is a member in Dykema’s Chicago office practicing in the areas of business and financial services litigation. He is a member of the Firm’s Financial Services Litigation Group and a co-team leader of the Firm’s Commercial Mortgage-Backed Securities Special Servicer Group. Mark’s practice covers a wide range of complex commercial litigation, lender’s liability defense, banking, fraudulent conveyance and general fraud litigation, class action litigation, contract disputes, commercial foreclosures, commercial real estate transactions, post-judgment collections proceedings, and general business disputes. Mark represents banks, credit unions, large CMBS special servicers, purchasers of non-performing commercial real estate and C&I loans and investors in loan enforcement litigation and commercial foreclosure actions.