February 5, 2023

Volume XIII, Number 36

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February 03, 2023

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Sunset of Certain Bankruptcy Code Changes

As we previously reported, the Bankruptcy Code saw many changes in 2020 and 2021. Some of the changes that were enacted under the Consolidated Appropriations Act, 2021 ("CAA") will soon end.

Prior to the CAA, the Bankruptcy Code allowed a bankruptcy court to give a debtor extra time (up to 60 days from commencement of the bankruptcy case) to pay rent due for the first 60 days of the bankruptcy case. Under the CAA, debtors who filed under chapter 11, subchapter V (added by the Small Business Reorganization Act) could ask for an additional 60 days to pay if they were experiencing hardships related to the COVID pandemic. Further, the time limit for tenants to decide whether to assume or reject a nonresidential lease was increased to 210 days from 120 days. These provisions are set to expire on December 27, 2022, returning this section of the Bankruptcy Code to its "pre-COVID" language.

The CAA also provided a provision to encourage landlords and their tenants and suppliers and their customers to work with each other to ease COVID-related financial strains. As described in more detail in our prior report, the CAA-added provision provided some protection from having these "workouts" later attacked as preferential transfers in a subsequent bankruptcy case. This provision is also expiring on December 27, 2022.

© 2023 Miller, Canfield, Paddock and Stone PLC National Law Review, Volume XII, Number 339
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About this Author

Ronald Spinner Bankruptcy Lawyer Miller Canfield
Principal

Ron Spinner brings extensive business experience to his bankruptcy practice, developing results-oriented strategies and breaking new legal ground where necessary to do so.

Indeed, Ron's ability to deal with novel situations helped tremendously in the City of Detroit bankruptcy case, where questions of first impression arose regularly. His ability to navigate the unique aspects of chapter 9 aided (and continues to aid) the City in its recovery.

As another example, Ron represented a creditor who "factored" the debtors' invoices. Courts typically characterize factoring as a "...

313.496.7829
Marc N. Swanson Bankruptcy Attorney Miller, Canfield, Paddock and Stone Detroit, MI
Principal

Marc Swanson is the deputy group leader of the Bankruptcy Group at Miller Canfield. He specializes in representing debtors, lenders, creditors, equity holders and unsecured creditors' committees in bankruptcy cases and related litigation in Michigan and throughout the country. Marc has extensive experience in the municipal, energy, automotive, banking and building supply industries.

Marc is currently the lead attorney for the City of Detroit in its bankruptcy case. In this role, Marc argued and won two bankruptcy appeals at the U.S. 6th Circuit Court of Appeals for the City. One of...

313-496-7591
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