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Using CARES Act Funds As Financing For a Small Business Chapter 11 Bankruptcy

One of the problems that prevents small businesses from using Chapter 11 bankruptcy more widely is the lack of affordable financing to fund operations while a Chapter 11 case is pending. Called Debtor in Possession (“DIP”) financing, financing for deeply distressed small companies that are experiencing an interruption in cash flow can be prohibitively expensive…

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Small Business Bankruptcy Provisions in the Proposed “Coronavirus Aid, Relief, and Economic Security Act”

At the time of this writing, the Senate has now passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the bill now awaits final approval by the House of Representatives and the President to be enacted into law. In addition to the well-publicized provisions providing direct financial relief to individuals and making…

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Four Quick Tips For Small Businesses During the Corona Virus Epidemic

So you’ve followed all the CDC guidelines, obeyed the orders issued by Governor Cuomo, and heeded the advice of my colleague Chris Jones with the same fanatical devotion as a samurai obeying his master.  (https://www.mackenziehughes.com/blog/new-york-provides-for-additional-paid-sick-leave-and-other-benefits-for-employees-under-covid-19-quarantine-order/). But most companies in the US are heavily indebted, and almost all companies’ cash flow will be reduced to a…

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It’s a Trap! Four Strategies for Turning Around a Struggling Company (That Almost Never Work)

As a bankruptcy practitioner, I have seen a fair share of business failures. Unless a company’s management is particularly nearsighted (or the failure is sudden and due to external forces), towards the end management teams do usually recognize that there are problems and try to correct them.

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Three Steps to Consider if a Customer is Going Down the Tubes

Imagine this scenario – your business has a major, long-time customer. The customer has been paying on its invoices, but payments have been coming more and more slowly, and there is now a substantial balance due on the account. On top of all that, you just sent them a large shipment of custom widgets on…

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Five Signs that Your Company is Doomed

We have seen a lot of companies go into bankruptcy over the years, and there are some common issues with most of them. These are issues that may not necessarily show up on the balance sheet, but in my experience they are sure signs that trouble is ahead. If some of the signs on this…

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