The economic turmoil stemming from the outbreak of COVID-19 has forced small business owners to take drastic measures to save their companies. Unfortunately, government subsidized loans, loan deferrals, and temporary rent relief may not be enough to save all small businesses.
Bankruptcy should never be the first choice for a business in financial distress, but it may be the best choice for all interested parties. This presentation will address bankruptcy strategies for businesses, including recent amendments to the bankruptcy laws that make certain small business cases faster and less expensive.
Goals of the presentation:
- Discuss what you can do as an accountant or financial advisor to help your business owner clients prepare for a successful reorganization
- Provide an overview of relief available under the Bankruptcy Code
- Explain recent amendments to the Bankruptcy Code and the advantages for certain small businesses
- While out-of-court workouts are often preferable, knowledge of bankruptcy and what could occur in bankruptcy are nonetheless critical to a reasonable out-of-court restructuring.
- Cash is king. It is critical for financially distressed businesses to manage outflows and collections, and 13-week cash flow projections are an important tool.
- The Small Business Reorganization Act creates a new and unique opportunity for small businesses to cost-effectively reorganize and retain current ownership.