Exiting Bankruptcy

WWD

August 30, 2020

A number of retailers that filed for Chapter 11 bankruptcy in the early months of the COVID-19 crisis are now at the finish line or close. To get here, retailers sought financing while facing the risks that come with months-long store closures, then reopened stores during the ongoing pandemic and struck deals with creditors, lenders, and in some cases, buyers. 

While the proceedings so far have shown courts willing to accommodate retailers’ requests and defer to their business judgment, there are still questions of long-term survival, bankruptcy attorneys said. 

“I think there’s going to be a tendency to approve things that may be less likely to be approved in a more healthy market environment,” said Zev Shechtman, partner at Danning Gill Israel & Krasnoff LLP.

“But in order to exit from bankruptcy, companies need to have a viable business plan going forward,” he said. “The question is, where is the money coming from on a going-forward basis?” 

“Bankruptcies can be really successful for reorganizations when there is an exit, a light at the end of the tunnel,” said Shechtman of Danning Gill.  “The bankruptcy story will be mirroring the general economic story in many ways,” he said. “If there is no end in sight for the economy, bankruptcy is not a silver bullet.”

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Government Stimulus Has Held Off Bankruptcies – For Now

Daily Journal

July 28, 2020

Danning Gill Partner John Tedford was quoted in a July 28, 2020 article in the Daily Journal about trends in bankruptcy filings in the United States and California.

According to recent U.S. Bankruptcy Court statistics, overall, bankruptcy filings are down nationally and in California, as the worst may be yet to come.

‘It’s not a big surprise, what is a surprise is we haven’t seen a boom over the last couple of months in bankruptcy filings despite all the relatively bad news, “ says Tedford, who handles bankruptcies for businesses on the debtor and creditor side. He said the court is on pace to have the same number of Chapter 11 cases filed this year as in each of the last five years.

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