COVID 19 (Coronavirus), Bankruptcy Relief and Contracts

The rapid spread of coronavirus has already affected tens of thousands of large and small businesses worldwide. The most recent quarantine and restrictions on continued operations of businesses has had significant financial impact on business and personal financial affairs. Hundreds of thousands of people being left without a paycheck has resulted in good hardworking folks being one month away from defaults on the mortgages, car payments, and credit card payments. The medical expenses for those directly affected by this horrible virus could be substantial and unaffordable.

Many businesses have been affected to due supply chain issues, lack of demand for their products and services, the inability or unwillingness of customers to pay invoices all of which has negatively affected cash flow. These events may result in credit line defaults, delinquencies with trade creditors and refusals of bank to renew credit lines.

WE CAN HELP. There are several government initiatives for businesses as well as individuals that may provide a lifeline. Moreover, with our knowledge and working relationships, with various banks and their counsel may be able to negotiate a resolution, facilitate workouts, forbearance agreements and other business preservation remedies.

You may also be a party to a contract that has become impossible to perform due to problems caused by the coronavirus. The legal doctrine of Force majeure may give you the ability to exit these contracts. According to Black’s Law Dictionary, force majeure is defined as “An event or effect that can be neither anticipated nor controlled.” Force majeure clauses allocate risk between the contracting parties if performance becomes impossible or impracticable because of an unforeseen event. This doctrine may give you the leverage you need to exit contracts that become unprofitable based on events out of your control.

If these solutions are not right for your company; financial restructuring may be the answer to save your company and all that you have spent your life building. A Chapter 11 Bankruptcy has many great options to restructure your company and more importantly for you to maintain control of your company upon exiting a Chapter 11 case.

Chapter 12 bankruptcy protection provides help to the lifeblood of this country- our farmers. Chapter 12 was specifically designed to help farmers. We are one of the few law firms in the Eastern District of Michigan that has the experience to successfully navigate through a Chapter 12 case.

One of our specialties for which we are widely recognized is our expertise in Bankruptcy Law. Be it an individual Chapter 7, or a reorganization plan under Chapter 11, 12 or 13 – we can help. For example, the specific purpose of Chapter 13 is to assist families and individuals time to catch up on missed payments and preserve your home and vehicles and other important assets that are important to you.

Inaction is not a solution. We are here to help. We currently have all hands-on deck and are ready to assist whenever and wherever its needed. We can meet in person or through the many different forms of electronic communications that the Firm has at its disposal.