Virginia, An Early Adopter Of Rent Relief For Retailers, Is Bankruptcy’s Latest Hot Spot

August 14, 2020

As retailers continue to file for Chapter 11 in droves, the Virginia court where many of them are seeking relief is joining the ranks of the most popular jurisdictions for large business bankruptcies, alongside New York, Delaware and Houston.

The Richmond branch of the U.S. Bankruptcy Court for the Eastern District of Virginia has become a hot spot for financially strapped retailers, including J. Crew, Lord & Taylor, Ann Taylor’s parent company, Ascena Retail Group, and Pier 1 Imports. The sudden uptick may be due in part to an April ruling from U.S. Bankruptcy Judge Kevin Huennekens in that case that permitted Pier 1 to put rent payments on hold, restructuring experts say.

“It was kind of novel and not the kind of thing you see every day because usually the expectation is if a debtor is utilizing the leased space in the ordinary course, it’s supposed to stay current on its rent,” said Zev Shechtman, a restructuring partner at Danning Gill. “So we see a trend of a debtor-friendly judge willing to stretch out the landlords.”

U.S. bankruptcy law offers Chapter 11 debtors leeway in determining where they will file for bankruptcy. Debtors are not required to file where they are headquartered or incorporated and can opt for a district where they have assets or a subsidiary. And, legislation to narrow bankruptcy venue options has failed to gain much traction.

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Big-Name Bankruptcies Flock to Two-Judge Court in Virginia

Bloomberg Law

September 15, 2020

By Zev Shechtman


The U.S. Bankruptcy Court for the Eastern District of Virginia has developed a reputation among corporate restructuring practitioners as a debtor-friendly venue that issues consistent rulings while running efficient operations.

So far in 2020, 9% of large, publicly traded company bankruptcies have been filed in the Eastern District of Virginia, according to the UCLA-LoPucki Bankruptcy Research Database.  That’s more than double the district’s share of major cases during the previous five years.

“Forum shopping is the story and Virginia is the flavor of the week,” said Danning Gill Partner Zev Shechtman.

Lord & Taylor, Ascena Retail Group, J. Crew, and Intelsat SA represent the large companies that filed for bankruptcy there this year following U.S. business shutdowns caused by the Covid-19 pandemic.

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Danning Gill Partner Uzzi O. Raanan to be sworn in as Secretary of the California Lawyers Association’s Board of Representatives

On September 26, 2020, during the CLA’s virtual Annual Meeting, partner Uzzi O. Raanan will be sworn in as Secretary of the CLA’s Board of Representatives.  California Supreme Court Chief Justice Tani Cantil-Sakauye is scheduled to preside over the CLA officer swearing-in ceremony, which will be conducted in conjunction with the California Judge’s Association’s officer swearing-in ceremony.

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Exiting Bankruptcy


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.

To read the full article, click on the link below (subscription required).

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Danning Gill Partners Participate in LABJ Bankruptcy & Restructuring Roundtable

Los Angeles Business Journal

July 27, 2020

Danning Gill Partners John N. Tedford IV and Uzzi O. Raanan participated in a Bankruptcy & Restructuring Roundtable with the Los Angeles Business Journal for its July 27, 2020 issue. The attorneys discussed the significant economic damages to businesses due to the COVID-19 pandemic, when it’s a good time for a business to file for bankruptcy as well as what are some bankruptcy pitfalls that businesses should avoid.

To read the full interview, click on the link below.

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Danning Gill News Quotes: Will Coronavirus Create a Debt Crisis for Movie Theaters?

As coronavirus cases rise in the United States, cinemas around the country are finding their plans for reopening in jeopardy, and that’s putting a greater strain on an economic sector that’s been hard hit by the public health crisis and was already facing challenges of evolving technology. Danning Gill Partner Zev Shechtman spoke with Variety about how entertainment businesses may be considering their options, including bankruptcy.

To read the full article, click here.

Danning Gill News Quotes: Virus Aid Continues to Elude Bankrupt Companies as Deadline Hits

Bloomberg Law

June 30, 2020

Danning Gill Partner Zev Shechtman spoke with Bloomberg Law about the legal fight over bankrupt companies’ eligibility to apply for the government’s coronavirus relief funds.

Companies have until midnight June 30, 2020 to apply for the loans made available by the Paycheck Protection Program, administered by the Small Business Administration to help businesses manage payrolls amid the economic turmoil caused by Covid-19.

The SBA blocks bankrupt companies from applying for the loans, a rule that has triggered lawsuits. Courts are conflicted on whether the SBA rule is legal.

“I don’t think I’ve ever seen so many cases on one issue in such a short amount of time with such divergent results,” said Shechtman.

Despite the litigation, the SBA’s policy is still a barrier for businesses without the resources to challenge a government agency in court, attorneys say.

At least one bankrupt business didn’t apply for the PPP, concerned that it “would be a fight and just a waste of time,” Shechtman said.

To read the full article, click here.

On May 4, Uzzi Raanan was elected to be a member of the board of directors of the Los Angeles Bankruptcy Forum (LABF)

On May 4, Uzzi Raanan was elected to the board of directors of the Los Angeles Bankruptcy Forum (LABF).  The LABF is one of the leading bankruptcy and insolvency professional organizations in the region, where lawyers, judges, accountants, and other bankruptcy professionals meet to share insights and learn about new developments in the field.  The firm has a long history of involvement in the LABF, with Richard Diamond, John Tedford, and Zev Shechtman as past or current officers of the organization.  As a longtime member of the LABF and contributor to its programming, Uzzi is a welcome addition to its leadership.  Congratulations Uzzi!