News
More Than Half of Emergency Small-Business Funds Went to Larger Businesses, New Data Shows
More than half of the money from the Treasury Department’s coronavirus emergency fund for small businesses went to just 5 percent of the recipients, according to data on more than 5 million loans that was released by the government yesterday evening in response to a Freedom of Information Act request and lawsuit, the Washington Post, on 12/2/20, reported.
On 12/17/20, the American Bankruptcy Institute (“ABI”) reports that US Congress and White House Race to Finish $900 Billion Covid-19 Aid Package
US House and Senate, and the White House face a rapidly approaching deadline to wrap up negotiations on another coronavirus relief bill, racing today to complete the details of the roughly $900 billion package and pass it through Congress before the end of the week, the Wall Street Journal reported. Top Republicans and Democrats are closing in on a relief package that would send another direct check to many Americans, enhance unemployment benefits, provide aid to small businesses and fund the distribution of the Covid-19 vaccine, among other measures. Because they are planning to approve a relief bill alongside a…
American Bankruptcy Institute on 11/25/20 published the following UPDATE ON PROPOSED EXTENSION OF THE PPP LOAN PROGRAM
With a change in administration likely within the next two months, and Congress scrambling to agree on another rescue package for millions of Americans facing yet more pandemic related economic hardship as many of the government subsidies and stimulus plans are set to expire the end of December, Senators Rubio and Collins have revamped S. 4321 initially introduced on July 27, 2020 (“Initial Proposed PPP III Legislation”),1 which would (finally) make the Payroll Protection Program loans (“PPP Loans”) available to debtors in bankruptcy. The PPP expired in early August 2020, and S. 4321 became bogged down in neverending partisan politics,…
Issue: Is Inaction of Creditor an Automatic Stay Violation?
On October 13, 2020, the US Supreme Court heard oral argument on City of Chicago v. Fulton, 19-357 (Sup. Ct. 2020), to resolve the Circuit split on whether a creditor who legally took possession of property of the debtor, prepetition, violates the bankruptcy automatic stay if the creditor does not return the property to the debtor, as soon as the debtor files bankruptcy. Supreme Court to resolve a circuit split by deciding whether a change in the status quo must occur before the automatic stay is violated. The Supreme Court heard oral argument this morning in City of Chicago v.…
Nearly 11 Million Households Missed Mortgage Or Rent Payments At Pandemic’s Outset
Nearly 11 million households fell behind on their mortgage or rent payments during the first three months of the COVID-19 pandemic, according to a new study by the Mortgage Bankers Association’s Research Institute for Housing America (RIHA). Meanwhile, 30 million people missed at least one student loan payment. The report contains data from an internet panel survey specially tailored to study the impact of the pandemic on rent, mortgage and student loan payment patterns. It found that the sudden onset of the pandemic led to abrupt job losses and reductions in hours worked. “However, federal government stimulus programs and employees…
U.S. Corporate Bankruptcy Filings at 10-Year High as COVID-19 Pandemic Inflicts Economic Pain
U.S. corporate bankruptcies are on their way to hitting a decade-long high, underlining the economic pain inflicted by the COVID-19 pandemic and efforts to limit the disease’s spread, MarketWatch.com reported. Total bankruptcies announced by U.S. companies so far this year stand at 470, the most for any comparable year-to-date period since 2010, according to S&P Global Market Intelligence. S&P’s analysis took into account both public and private companies with public debt. Most of the bankruptcies were concentrated in retail, energy and manufacturing, with larger defaults such as J.C. Penney and Chesapeake Energy occurring exclusively in these industries. Analysts say many…
Bankruptcy and Social Security Income
In In re Welsh, 711 F. 3d 1120, 35 (9th Cir. 2013) the Ninth Circuit Court held: “We conclude that Congress’s adoption of the BAPCPA forecloses a court’s consideration of a debtor’s Social Security income or a debtor’s payments to secured creditors as part of the inquiry into good faith under 11 U.S.C. § 1325(a).” So in the Ninth Circuit social security income, and debtor’s monthly payments owed to secured creditors (on Notes secured by Deeds of Trust, secured vehicle loans, etc) cannot be counted in a Chapter 13 case, to determine whether or not the debtor’s proposed Chapter 13…
Serious Mortgage Delinquencies Soar To a 10-Year High, reports Credit & Collection e-newsletter on 8/24/20
Good News and Bad News – The Black Knight Mortgage Monitor for July has a bit of good news and bad. The Good News: Mortgage delinquencies continued to improve in July, falling 9% from June, with more than 340K fewer past due mortgages than the month prior. Early-stage delinquencies (30 days past due) have fallen below their pre-pandemic norms. This is a good sign that – at least for the time being – the inflow of new COVID-19-related delinquencies has subsided. Though foreclosure starts ticked up slightly for the month, COVID-19 foreclosure moratoriums are keeping both foreclosure starts and completions…
Analysis: Small Firms Die Quietly, Leaving Thousands of Failures Uncounted
American Bankruptcy Institute on 8/12/20 reports that big companies are going bankrupt at a record pace, but that’s only part of the carnage. By some accounts, small businesses are disappearing by the thousands amid the COVID-19 pandemic, and the drag on the economy from these failures could be huge, Bloomberg News reported. “Probably all you need to do is call the utilities and tell them to turn them off and close your door,” said William Dunkelberg, who runs a monthly survey as chief economist for the National Federation of Independent Business. Nevertheless, closures “are going to be well above normal…
Struggling Retailers Use Bankruptcy to Break Leases by the Thousands
Struggling Retailers Use Bankruptcy to Break Leases by the Thousands, reports the American Bankruptcy Institute, on 8/620: With the pandemic intensifying the plight of U.S. retailers, companies ranging from J. Crew Group Inc. to the owner of Ann Taylor are using chapter 11 bankruptcy filings to quickly get out of costly, long-term leases and shutter thousands of stores, Bloomberg News reported. By seeking court protection, firms like Neiman Marcus Group Inc. and the parent company of Men’s Wearhouse avoid the headache of protracted negotiations with individual landlords. But the moves threaten to upend huge swaths of the real estate market…