As COVID-19 caused a swift slowdown to Florida’s economy, bankruptcy attorneys across the state expected to receive a flurry of telephone calls, and they weren’t disappointed.
Large and small companies alike state-wide have had to face reduced foot traffic, occupancy limits, and shorter trading hours, and paired with the slow down in Chinese imports, it’s no wonder that so many businesses have been seeking out the best Orlando bankruptcy attorney.
Since the start of the coronavirus crisis, many clients have sought advice from Florida’s bankruptcy legal professionals, many of whom are wholesalers who rely heavily on imports from China and hospitality companies that have seen a massive downturn in business.
The financial times are uncertain at the moment, and Florida’s legal teams are gearing up to handle the situation.
Bankruptcy – The Final Resort
Usually, bankruptcy is seen as a final resort once every other option has been fully explored, including using all possible lines of credit. However, this isn’t cheap or easy and depends heavily on the quality and amount of collateral available.
Some leaders will always be more aggressive and may finance cash flow or accounts receivable for extremely high rates. Yet getting additional credit under the current circumstances may only lead to an even more precarious financial situation for borrowers.
It’s hard to identify which organizations are most likely to look for bankruptcy protection. While large, well-established companies may be expected to weather this storm, should they already be facing headwinds, the chances of them filing are much higher. Meanwhile, small businesses may not be as vulnerable as you’d expect. Convenience stores and small online businesses are still attracting shoppers.
As a general rule, businesses selling essentials such as groceries are retaining good patronage, even if they weren’t thriving before the pandemic hit. However, for businesses that are already struggling, such as physical retailers reeling under the impact of the growth of the e-commerce sector, seeking protection may be the only option.
Protections For Landlords
Landlords in Florida are now exploring all their options. Bankruptcy codes are complicated, and the provisions that relate to commercial landlords are especially complex.
For example, under the terms of Chapter 11 bankruptcy, a tenant has 180 days from the date of filing together with a 90-day extension in which to decide whether or not they wish to keep a lease. Under the rules of Chapter 7 bankruptcy filings, the time period is reduced to just 60 days, and after this, the lease will be rejected. Nevertheless, the tenants won’t be completely exempt from paying their rent. When the 60th day has passed, the court will compel the tenant to pay their rent and also to comply with the lease’s terms, or the landlord can recover the space.
The Future of Business in Florida
It’s clear that the current health crisis has led to a host of financial problems across Florida, and many businesses look set to struggle for the foreseeable future. However, with the right legal advice from an experienced Orlando attorney, it’s possible for companies of all sizes to weather this pandemic.