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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INCREASING SUBPRIME AUTO LOAN DEFAULTS – THE CANARY IN THE COAL MINE FOR 2023 BANKRUPTCY FILINGS

By: Charles M Tatelbaum and Corey D. Cohen, Tripp Scott PA

Experience tells us that the recent increase in subprime auto loan defaults can be a reliable predictor of an overall increase in consumer bankruptcies which, in turn, causes problems for businesses in many sectors.  Recently reported data discloses that in the fourth quarter of 2022, subprime auto loan defaults increased by slightly more than 30%.

These defaults rise from a number of reasons, namely:  (1) higher interest rates on the subprime loans that have a floating rate of interest; (2) inflationary increases which have pinched consumers' budgets; and (3) increased costs of rental housing.

TSE's Candice Ericks Named One of City & State's Women Power 10

FORT LAUDERDALE, Fla., January 25, 2023 – Tripp Scott today announced that Candice Ericks, Director of Government Relations for TSE, the governmental affairs division of Tripp Scott, was named one of City & State Florida's Women Power 100. 

City & State is the premier media organization dedicated to covering Florida, New York and Pennsylvania's local and state politics and policy. Its in-depth, non-partisan coverage serves Florida’s leaders every day as a trusted guide to the issues impacting Florida. City & State Florida's Women Power 100 list is comprised of elected officials and high-powered lobbyists, leaders from the worlds of business, nonprofits, media, social justice, conservative think tanks and what we call the “persuasion industry”: public relations, strategic messaging and fundraising.

Tripp Scott Attorneys Represent Datum RMS for Major Sale of Controlling Stake to AES Engineering Ltd

FORT LAUDERDALE, Fla., January 24, 2023 – Tripp Scott today announced that its team, Tanya Bower, director and Arsen Pascua, attorney, successfully represented Datum RMS in the sale of the controlling stake of the company to AES Engineering Ltd.

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