What’s New in Business?
Debt of Single Asset Real Estate entity blows Subchapter V Eligibility
A recent bankruptcy court decision has found the debt of an affiliate that is ineligible to file for Subchapter V to be included in the $7.5M threshold for eligibility (and post-CARES Act, a $2.7M threshold). In this case, the affiliate was a single asset real estate entity. This decision appears counterintuitive. Stay tuned for an appeal?
Read MoreThe Catch 22 in Crowdfunding Campaigns
A recent study shows that crowdfunding psychology requires a unique fundraising strategy. An abundance of early donations is viewed as originating from friends and family who have not scrutinized the deal, while the opposite is inferred from a lean start. Balancing this perception from day 1 is key to a successful campaign.
Read MorePPP Recipients can Self-Certify for Small Loan Forgiveness
Thankfully, the SBA has issued new guidelines for PPP loan forgiveness with the following changes. Recipients of $50,000 or less can self-certify that the money was used for covered expenses, the new application is one page short, and the requirement to maintain employee and salary numbers has been eliminated. This is a great step toward accomplishment of…
Read MoreTitle VII Loophole Allowing Bank Discrimination May be Soon be Closed
As our country reconciles inequity in the law, The Fair Access to Financial Services Act, introduced last week, prohibits discrimination by banks, closing a gaping loophole. Title VII subjects only certain businesses to its prohibitions, such as movie theaters, restaurants and hotels, allowing banks to treat customers differently. While many states prohibit bank discrimination, the disparity necessitates…
Read MoreThe Right to Repair Movement embraces Mobile Health
On a consumer plug today, I am excited by the “right to repair” trend that has surfaced in a proposed bill to block manufacturer imposed limits on medical device repair. While advocates worry about the environment, an important fall-out is consumer inability to take ownership of product maintenance. Of course safety is key, and I…
Read MoreSubchapter V allows Cramdown of Collateral Value
In Pearl Resources, another case of first impression under Subchapter V, a Texas court confirmed a cramdown plan with a reduced collateral value. Parsing a mix of traditional and new chapter 11 provisions, the court permitted a $7.4M replacement lien for the original $35M lien, deeming it sufficient to cover the $1.2M claim, and thus freeing up…
Read MoreSubchapter V has become a cost-effective bankruptcy lifeline for a business reboot
A group of mid-western businesses comment on their unique ability to reorganize under Subchapter V of the Bankruptcy Code in accordance with its intended goal to allow small business owners to retain control of a reorganizing company. Drafters of the new law effected much needed tweaks to the chapter 11 process, an endeavor that has proved to…
Read MoreUber and Lyft are Counting on Referendum to Override recent Appeals Court Ruling
As the Uber-Lyft talent saga continues, it is a fascinating legal phenomenon that a grass-roots referendum can override the decision of the highest court of the state. This is a true reflection of democracy, although tempered or arguably tainted by corporate lobbying. Wishing everyone a great weekend!
Read MoreHow Intrapreneurship is playing out in the race toward a COVID-19 vaccine
Wearing my digital health professor hat, I am sharing this article about the legal, social and political dynamics involved in forging a licensing deal between Oxford scientist inventor-founders of start-up Vaccitech, academia and big pharma AstraZeneca with the twin goal of profit and global access for a COVID-19 vaccine.
Read MoreAn Individual Chapter 11 Plan must be funded by more than Business Income
In re Patel, a recent CA bankruptcy decision, held that chapter 11’s requirement for individual debtors to pay unsecured creditors from “disposable income,” encompasses income from all sources. Note that this would equally apply in Subchapter V. The Patel Chapter 11 plan listed only motel income which was insufficient to fund a payout to unsecured creditors. While…
Read More