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Another tool in the toolbox.
Thanks Lindy!
Tim
---
Tim Ryan
Economic Development Specialist
Town of Wallingford
Office: 203-294-2062
Cell: 203-631-2354
Email: [log in to unmask]
Web site: https://nam10.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.plugin2wallingford.com%2F&data=02%7C01%7CECONDEV-L%40listserv.uconn.edu%7C0f43ebc713ac48a17b5d08d7edd05704%7C17f1a87e2a254eaab9df9d439034b080%7C0%7C0%7C637239351384207096&sdata=5zwCgpqRVt3pUF6xR6RKcjMLwArqfUwMX2LTxGqZGsM%3D&reserved=0
On 2020-05-01 07:48, Gold, Lindy wrote:
> *Message sent from a system outside of UConn.*
>
> The SBRA, appearing in Subchapter V of Chapter 11 of the Bankruptcy
> Code, provides small businesses with a more streamlined and
> cost-effective restructuring process than the traditional Chapter 11
> bankruptcy. Why does this matter? Because high administrative costs
> had made it impossible for many small business owners to use
> bankruptcy to successfully restructure their debts, and they instead
> had to shut down their companies.
>
> Even before the pandemic, the SBRA was meant to provide a much-needed
> lifeline to small businesses struggling to survive. The CARES Act
> makes a temporary, but significant, amendment to the SBRA--making this
> lifeline available to many more businesses in financial distress.
>
> As originally written, the SBRA provides for a "debt ceiling" of just
> over $2.75 million for a "small business debtor" (either a company or
> an individual) that/who is primarily engaged in commercial or business
> activity. Now, the CARES Act temporarily increases that debt limit to
> $7.5 million. Lifting the ceiling increases the number, and types, of
> businesses that can use bankruptcy to survive the current crisis.
>
> The SBRA, as amended by the CARES Act, will be a critical tool to save
> businesses. Expanding access to the SBRA's streamlined reorganization
> process will facilitate the recapitalization of these otherwise viable
> businesses and help them to bounce back from the economic effects of
> the pandemic more quickly, easily and cheaper than the traditional
> Chapter 11 process.
>
> Another major change under the SBRA means that business owners no
> longer need to provide their own capital (also referred to as "new
> value") in order to reorganize over the objections of their unsecured
> creditors. This, in turn, means that business owners are in a much
> stronger negotiating position than they may have been in the past.
> Now, a small business owner can tell its unsecured creditors, "There's
> nothing to prevent us from confirming our plan of reorganization even
> if you disapprove, so let's make a deal."
>
> Creditors will also need to understand how to navigate this new
> bankruptcy path because it affects them, too.
>
> The biggest problem that most creditors face in a bankruptcy--indeed,
> in any type of court proceeding--is uncertainty. Because that
> uncertainty is now compounded by the unpredictability inherent with a
> global pandemic, it would be beneficial for creditors to understand
> these new laws so they protect themselves, and hopefully reach
> agreements as to how much, and when, they will eventually get paid.
>
> The same logic applies to landlords and other secured creditors. Since
> it is unlikely that commercial landlords will be able to find
> replacement tenants during a global pandemic, they would be wise to
> work collaboratively with their current tenants to ensure they can
> restart their businesses, and start paying rent again, as soon as
> possible.
>
> A clever restauranteur or hotelier who reaches deals with his
> creditors before filing for bankruptcy can also file what's known as a
> "prepackaged" plan of reorganization. Business owners who have
> everything neatly "tied up with a bow" will be more likely to have
> their plans approved by the court, certainly faster and at a much
> lower cost.
>
> Given that we will see a flood of bankruptcies in coming months,
> debtors and creditors should start thinking now about how to assemble
> reorganization plans that include outside financing. Debtors can watch
> for investment funds now being formed that will put their skin in the
> game, albeit at higher interest rates. They will support plans that
> have a reasonable likelihood of success.
>
> With more leverage and leeway under the SBRA and the CARES Act,
> debtors, hoteliers, restauranteurs and other South Florida business
> owners should understand that bankruptcy is not the dead end it may
> have been just two months ago. Creditors should also realize this too.
> Proper use of the two acts together means that, rather than lose their
> restaurants or hotels to debts that are piling up during the prolonged
> pandemic closure, business owners can work out a plan to keep their
> employees and save their businesses. If both sides work together, they
> can save more businesses, more jobs and ultimately help the South
> Florida economy come back faster--for everyone's benefit.
>
> These changes will only last until March of 2021, so it is extremely
> important for business owners to act quickly if they want to take
> advantage of these critical tools to help protect their investments
> and save their businesses.
>
> MATTHEW S. KISH_ is an attorney with Shapiro, Blasi, Wasserman &
> Hermann focusing his practice on bankruptcy, corporate restructuring
> and creditor rights. He may be reached at 561- 477-7800 or
> [log in to unmask]
>
> FROM: Econdev-L <[log in to unmask]> ON BEHALF OF Marano,
> Thomas E.
> SENT: Wednesday, April 29, 2020 9:21 AM
> TO: [log in to unmask]
> SUBJECT: Quick Read on Quick Service Restaurants -- QSRs
>
> *Message sent from a system outside of UConn.*
>
> Friends:
>
> https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.globest.com%2F2020%2F04%2F28%2Fdespite-the-coronavirus-net-lease-investors-still-have-an-appetite-for-qsrs-heres-why%2F%3Fkw%3DDespite%2520the%2520Coronavirus%252C%2520Net%2520Lease%2520Investors%2520Still%2520Have%2520an%2520Appetite%2520for%2520QSRs.%2520Here%2527s%2520Why.%26utm_source%3Demail%26utm_medium%3Denl%26utm_campaign%3Dspotlightonalert%26utm_content%3D20200428%26utm_term%3Drem&data=02%7C01%7CECONDEV-L%40listserv.uconn.edu%7C0f43ebc713ac48a17b5d08d7edd05704%7C17f1a87e2a254eaab9df9d439034b080%7C0%7C0%7C637239351384207096&sdata=lf9NThF927zRnp9ZQzqwB2d%2FyYGv4a2N66KFXdLPB5U%3D&reserved=0
> [1]
>
> Some lingo --- QSR: Quick Service Restaurant: MacD's, Wendy's
>
> STNL - Single Tenant Net Lease
>
> Happy reading.
>
> Regards,
>
> Thomas Marano
>
> Economic Development Specialist
>
> City of Middletown
>
> 245 deKoven Drive
>
> Middletown, CT
>
> [log in to unmask]
>
> 860.638.4839
>
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> [1]
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