Even successful small businesses often work on tight margins and need a steady revenue stream to keep the doors open and make payroll. COVID-19 seriously affected nearly every aspect of American commerce, but industries that rely on in-person contact truly suffered, which is why numerous restaurants, hair salons and dentistry practices continue to face serious debt problems as the pandemic continues. At Wolff & Orenstein, LLC in Rockville, we are attorneys with more than 60 combined years of legal experience and utilize the latest advances in bankruptcy law to help Maryland small businesses overcome financial challenges that threaten their survival.
Though many large companies used traditional Chapter 11 bankruptcy to reorganize their debt load and return to financial stability, the process of obtaining relief was arduous. Someone running a barbershop, private dental practice or family restaurant might not have the time or resources to develop a reorganization plan that could win the approval of creditors.
To relieve the burden on mom-and-pop establishments, Congress enacted the Small Business Reorganization Act in 2019, which streamlined the bankruptcy process for businesses with a debt load of up to $2.5 billion. Following the onset of the COVID-19 pandemic, this limit was temporarily extended to $7.5 million so that more small businesses could benefit. This extension means that the increased limit now applies to any debtor that files for bankruptcy up to March 27, 2022. Advantages of this new method of business bankruptcy include:
As in traditional Chapter 11 bankruptcy, you can keep the doors open and collection actions must be halted once the automatic stay is entered. Firm member Michael Wolff is a Chapter 11, Subchapter V trustee and well versed in this new process that offers a lifeline to many small businesses coping with severe financial challenges.
With the expiration of COVID-related eviction moratoriums, many small businesses might need to rely on Chapter 11 protection to address lease arrears and make changes to existing rent terms. Our firm can assist you with the bankruptcy process and discuss any available relief programs, including those specific to your industry. For example, Maryland created the Restaurant and Caterers RELIEF Grant Program as a response to the problems that those establishments have faced.
For decades, franchises have been a major force in the restaurant industry, and that model has now become increasingly popular within the personal care field. Instead of going out on their own, many hair salon owners and dentists and others have entered into contracts that give them the ability to rely on a franchisor’s operations blueprint and marketing expertise. However, if things don’t go as planned, a struggling franchisee might want to make a new start by filing for Chapter 11 bankruptcy and breaking their franchise agreement. Whether this is possible depends on the particular terms of your agreement. We will carefully evaluate the specific language and outline your legal options. As an executory contract, a franchise agreement usually must be assumed or rejected in whole. You cannot maintain some benefits while giving up some obligations.
Wolff & Orenstein, LLC in Rockville advises small businesses in Montgomery, Frederick and Prince George’s counties on bankruptcy filings and other debt relief options. To schedule a free consultation, please call 301.250.7232 or contact us online.
Skilled Bankruptcy Attorney in Maryland Biography: Michael G. Wolff is a seasoned veteran with more than 30 years of experience practicing bankruptcy law. He is a respected attorney responsible for handling complex bankruptcy cases. He has served as a Bankruptcy Trustee for over 20 years in Maryland. He also enjoys a superior reputation among his…
Commercial Litigation & Consumer Law Firm Attorney Biography:Jeffrey M. Orenstein is a skilled commercial litigator with a particular emphasis on bankruptcy litigation. He has been appointed to serve as Bankruptcy Trustee and Examiner in complex Chapter 11 cases. For more than 25 years, he has represented bankruptcy estates, bankruptcy trustees in multiple jurisdictions, creditors and…
Biography Matthew E. Abbott is the latest attorney to join the Wolff & Orenstein, LLC team. Matthew graduated from American University Washington College of Law in 2019 after working for Wolff & Orenstein, LLC and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) as a law clerk. Prior to…