Articles

The Chapter 12 Family Farmer Bankruptcy Update

A continued low-price environment for commodities, trade uncertainty and COVID-19 issues impacting supply chains and labor costs have continued to put pressure on family farmers. In the first quarter of 2020 there were 170 Chapter 12 bankruptcies nationwide up from 130 during the same period in 2019. Despite an increase in the debt limit from […]

The Ninth Circuit Clarifies its Position on Third-Party Releases in Bankruptcy

Many Ninth Circuit courts, including Arizona Bankruptcy Courts, have relied on previous Ninth Circuit decisions primarily In re Lowenschuss and In re American Hardwoods, Inc. to prevent a bankruptcy plan from impacting obligations of non-debtors. However, the Ninth Circuit in Blixseth v. Credit Suisse allowed for an exculpation clause that protected certain non-debtor parties from […]

Bankruptcy Court Takes Steps to Keep Reorganizations Affordable for Small Business Debtors

               A bankruptcy court in the Eastern District of North Carolina took a first and important step to effectuate the purpose of the Small Business Reorganization Act (“SBRA”) to make chapter 11 reorganization affordable for small businesses by denying a trustee’s request for counsel as a matter of course, thereby limiting expenses to the debtor’s […]

Protecting a Farmer’s Right to Payments with Bankruptcy

In a Chapter 12 bankruptcy, the Bankruptcy Court protected the ability of a farmer to receive crop subsidies from the U.S. Department of Agriculture (“USDA”) even if the farmer’s loan is in default. Outside of bankruptcy, the USDA had the right to set-off the payment. In bankruptcy, the farmer may receive some much-needed liquidity. In […]

PPP Loan Forgiveness and the False Claims Act

          On May 15, 2020, the Small Business Administration (“SBA”) announced the loan forgiveness application associated with the Payroll Protection Program (“PPP”) loan allowing small businesses to apply for loan forgiveness if it received a PPP loan. The application requires information regarding the “eligibility for the PPP loan.”           Specifically, loan eligibility was questioned because […]

Piercing the Corporate Veil – A Concealed and Extended Liability Period

Almost all lawsuits have a period within which they must be brought known as a statute of limitations. In Arizona, the statute of limitations for most issues regarding personal injury or negligence is two years and six years for contract actions. However, if the party alleging the injury or damage does not bring the claim […]

COVID-19’s Impact on Agribusiness

Cotton farmers and dairy farmers in Arizona were dealing with commodity price fluctuations that created business issues prior to the pandemic. While the rural communities of Arizona have not been the center of the pandemic, the food supply remains in a good position. However, the rural communities are not immune from the impact of the […]

The Importance of Friendly Secured Creditors in the Time of Uncertainty and Asset Protection

In times of crisis or uncertainty, such as the pandemic, few creditors are eager to litigate. Many creditors will simply be silent and send invoices, while others will be proactive in determining what can be done and understand that your business continuing is in their best interest. Business owners or friends or family members of […]

Commercial Evictions Suspended Through May

On Monday April 6, 2020, Governor Ducey issued Executive Order 2020-21, granting a welcome reprieve to small businesses facing eviction during the COVID-19 pandemic. Governor Ducey’s order requires courts suspend commercial evictions for small businesses, unless the court determines that failing to evict would be contrary to the interests of justice. This includes suspension of […]

Will Business Reorganization Become More Efficient?

The new Small Business Reorganization Act is effective as of February 19, 2020. The intent of the new law is to create a streamlined, cost-efficient path for small businesses to successfully restructure. As of the Effective Date, the debt limit for a small business case is $2,725,625, which limits who may qualify. The may limit […]