The Lull Before The COVID-19 Bankruptcy Storm?

As the fear of the novel coronavirus grows, so does the statistical likelihood of a U.S. recession.  Although current bankruptcy filings in the United States District Court for the District of Colorado are below the pace of filings during the same period in 2019, individuals and corporations alike may be taking a wait-and-see attitude.  Likewise, predictive models on the likelihood of a person or company filing bankruptcy may not yet be able to take into account the effect the pandemic has had on the U.S. economy and the inability to generate revenue.  Nonetheless, for those businesses who rely on a predictive stream of income to their accounts receivable, the potential for a preferential transfer claim, and for a claw-back of monies received within the preference period as a result of an unanticipated bankruptcy filing, should be considered when conducting business in this climate.

Hall & Evans can assist with questions related to risk mitigation in the bankruptcy arena.  Our attorneys have represented banks, companies, credit unions, individuals, insurers, and other financial institutions with regard to matters occurring both before and after the commencement of a bankruptcy matter.  Our experience includes defending against attempts by creditor’s committees, debtors, and trustees who seek either implication of a preferential transfer in an attempt to avoid and disallow claims, or claw-back monies from a company’s accounts, or both.  Hall & Evans also represents clients in actions brought against officers and directors, licensed professionals, and others named as defendants in actions brought before the bankruptcy courts.  Drawing upon our diverse legal specialties of colleagues throughout the Firm, we provide our clients with creative and practical solutions within the bankruptcy context.  If you have any questions regarding the COVID-19 pandemic and bankruptcy, please contact Tim Murphy or Mark Ratner.