Since the enactment of the U.S. Bankruptcy Code in 1978, there have been myriad economic cycles that have necessitated modifications in the way lending and restructuring communities operate, but nothing like the changes required by the onset of the coronavirus pandemic.
This month’s JCR touches on the systemic changes the pandemic has brought to our profession, which will reverberate in the industry for years to come.
We lead off with an article from Sean Beach and Jaime Luton Chapman of Young Conaway Stargatt & Taylor LLP outlining how the pandemic accelerated the fracturing of existing cracks in the economy and necessitated innovative solutions from restructuring professionals to deal with the sudden, unanticipated onslaught of restructuring and bankruptcy cases caused by, among other things, stay-at-home orders issued by many state and local authorities. Companies and lenders had limited options.
The next article, by my partner Dan Ford of Hahn & Hessen LLP and myself, addresses issues effecting traditional and nontraditional lenders in this economic environment. Lenders are caught between a rock and a hard place—do they work with borrowers who have some level of liquidity to help them through the pandemic or call events of default, which could bring about unintended consequences that are not appealing to either side? Their choices can also be dictated by changes in U.S. monetary and banking policies.
Kathryn McGlynn and Robert Winning of AlixPartners then focus our attention on one of the first novel issues to effect bankruptcy proceedings, particularly for retail entities, during the pandemic—payment of rent at the initial stages of a bankruptcy when retail locations were not permitted to open (or were open but with limited capacity) pursuant to governmental directives. Does the Bankruptcy Code give the Bankruptcy Court discretion to deal with this issue? Kate and Rob answer that question.
Then, Kevin Carey, a former bankruptcy judge in the District of Delaware, interviewed four of his former colleagues from across the country to address their experiences during the pandemic. Each of the bankruptcy judges has embraced the use of new technology in his courtroom and intends to retain some use of this technology post-pandemic. They also shared their views on the good, the bad, and the ugly of court hearings in the pandemic and their ability to handle the magnitude of cases anticipated to file in the future.
Finally, Pankaj Amin of SC Ventures provides a very relevant article on the importance of managing culture in the workplace. In this post-pandemic environment, this may be more important than ever.