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A local group of bankruptcy judges and insolvency professionals has published recommendations for ways that the U.S. Bankruptcy Court for the Central District of California can address obstacles for small businesses needing to file for chapter 11, including educating about the availability of subchapter V.[1] In late 2019, Chief Bankruptcy Judge Maureen A.

The new year brings several changes to bankruptcy practice through the enactment of the Consolidated Appropriations Act, 2021 (CAA), which augments the CARES Act by expanding the Paycheck Protection Program (PPP), adding stimulus programs and installing coronavirus relief valves for troubled sectors of the economy.[1] Those relief valves include temporary revisions to the Bankruptcy Code in the areas of debtor-in-possession (DIP) financing, avoidable preferences, nonresidential real property leases, mortgage-servicing, custom duties and more.

Co-Chair Corner: Year in Review

The hotel industry has suffered significantly since the outset of the COVID-19 pandemic. Occupancy rates for hotels in urban areas in August 2020 were down to 38% compared to 89% in August 2019.[1] Many hotels, particularly those in New York, were forced to furlough staff in response to local requirements and economic pressures.

Many professionals anticipate that valuation will be the fulcrum issue in the upcoming wave of chapter 11 cases, and creative advocacy will be at a premium.

Traditional Valuation Approaches and the Bankruptcy Code

With the mandatory government shutdown orders, surges in unemployment affecting rental demand, prices declining and companies driven to shift their workforce to remote work, 2020 has certainly left a mark on commercial leases. The general feeling of uncertainty as we head into the New Year in the midst of COVID-19’s economic disruption is surely going to continue impacting bankruptcy retail cases.

On March 17, 2020, in response to the COVID-19 pandemic to protect its customers and employees, J.C. Penney opted to close all of its stores and decrease supply chain operations.[1] Then, in mid-May, J.C. Penney and its affiliates (the debtors) filed for chapter 11 protection in the U.S.

In a significant recent decision in the Alta Mesa chapter 11 case,[1] Bankruptcy Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) held that the debtors’ midstream oil and gas gathering agreements constituted real property covenants “running with the land” under Oklahoma law and, therefore, could not be rejected as executory contracts under § 365 of the Bankruptcy Code.