Bankruptcy and Restaurants.
Originally Published : April 27, 2020
HOPE IS NOT A PLAN…
Dear HL Clients,
It’s going to be a while until we are back up to speed. I’m thinking 2nd Quarter 2021 before we see the industry and sales approaching normal. We can hope that it happens faster and we can hope for a vaccine and we can hope that our landlords are understanding but hope just ain’t a plan.
Some owners are making the decision to bow out now. Take a seat on the sidelines, rest their weary bones and come back rested and strong when the nightmare is over. It’s a legitimate strategy but it’s a big move so you have to know how to do it while inflicting the least amount of damage. You have apartments and houses and families and everything you have built to protect after all.
So, it’s time to talk about the idea of bankruptcy. You just need to know that it’s one of the tools in your business Swiss Army knife. Look, we all hope we don’t need that car window glass-breaker thingy but I’m happy to know it’s in their if I need it. The same goes for bankruptcy. We hope we don’t need it but we should know how to use it if we do.
Today we are pleased to introduce Alanna Morgan, our new Bankruptcy Attorney. Alanna will serve as “of counsel” to the firm and she will be available to talk to HL clients who just want to understand how bankruptcy works or are more seriously contemplating it for their business. She’s cool, she’s understanding and she will break it down for you in a way that you will be able to use if needed.
So, here is Alanna:
Not All B Words Are Bad- by Alanna Morgan
Alanna Morgan here. Nice to meet you all and allow me to introduce myself. I’ll be taking on an “of counsel” role at Helbraun Levey to help expand the firm’s bankruptcy knowledge base—an area of law that you may have found yourselves thinking more about these last few crazy weeks. I’m also an associate at Morgan & Bley, Ltd., a top boutique law firm that handles not only bankruptcies and reorganizations, but really anything that’s business related. I mention that I don’t do only bankruptcy work because I want you to know that I don’t treat bankruptcy for my clients like hammers treat nails: there is no one-size-fits all approach. So please, don’t be scared of the “b” word, and don’t be scared to consult with a “bankruptcy” lawyer.
How does bankruptcy work? Can it help me and my business? What even is bankruptcy, anyway?
Without getting too technical about a technical process, the first thing I want to mention is that there are different kinds of bankruptcies but I just want to touch on two here. One kind, called a “Chapter 7,” might be what you traditionally think of when you hear the word bankruptcy. On it’s most basic level, Chapter 7, which is available to both individuals and businesses, liquidates your assets and gives them to your creditors in exchange for discharging your debts. There’s also another kind of bankruptcy, a Chapter 11, which is more aptly thought of as a “reorganization.” A Chapter 11 case tries to keep a debtor alive by offering a plan of payment to its creditors and the creditors vote yea or nay as to whether to accept it. This is a way in which the bankruptcy system can be used to save and protect your business from the vicissitudes of temporary economic shocks.
The bottom line is that knowledge is power, and the more time you give me to explore all your options with you, the better. For me, this always includes talking about avoiding bankruptcy altogether, so just because you meet with me does not mean you’re ready to close your doors— in fact, I’m more useful to you when you haven’t yet hit that point. Another reason it’s useful to begin discussing the bankruptcy process sooner rather than later is because filing bankruptcy invites outsiders, including the Government, to investigate your financial dealings. Bankruptcy is often called “life in a fish bowl” in that it requires extensive and accurate disclosures by debtors, and just filling out the paperwork is a time consuming feat. My goal is for every bankruptcy client to be an “A+ Debtor,” and like any other test, the greater the time you have to prepare, the higher your chances are of success.
Along with the team at HL, I can help you strategize which creditors to pay now, when the right time to file bankruptcy is, what type of bankruptcy will work best for you, and if you should file in the first place. On that note, I’m offering to all HL clients the following new “bankruptcy consult” package. This package will be offered at a flat fee of $750 and will include the following:
Initial Consultation. I’ll give you some basic background on the bankruptcy process, and you can give me a basic background on both your goals and your business and personal financial situations.
Review of Your Financials. I’ll then send you a set of bankruptcy paperwork to fill out. This doesn’t mean you’re filing for bankruptcy – I just find these forms the most helpful for getting a full picture of your finances. I will review that paperwork, as well as have my lead counsel at Morgan & Bley, Ltd., Keevan D. Morgan, review it.
Follow Up Consultation. After reviewing your paperwork, we will meet with you for a follow up consultation that is based on you and your business’s specific asset, income, and debt structure. Together, we will come up with a strategy moving forward that best meets your goals and needs.
I’m here when you need me, and I look forward to helping HL clients navigate this crazy time. You can reach me at: [email protected]
Email your City Council Member and let them know that you support Int 1932-2020.
This is the bill that would remove personal liability from commercial leases for places affected by Covid. This would be a game changer and would keep many restaurants in business. Please contact your Council Member!!
The Committee on Small Business is meeting on Wednesday at 1:00. Here are the members of the committee: Mark Gjonaj, Chair Members: Stephen T. Levin, Bill Perkins, Ydanis A. Rodriguez and Helen K. Rosenthal. Here is the guide to find your Council Member: https://council.nyc.gov/districts/
Register for our Landlord/Tenant Webinar: Peace on the Lower East here: https://zoom.us/webinar/register/WN_YjohamXVS2WDHxNECtKLgg.
It’s Tomorrow, Tuesday April 28th at 1:00
Keep the dreary days coming. Makes me feel a little less upset about missing the greatest season in NYC. As Ella sang; “Spring can really hang you up the most”.