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COVID-19 and Chapter 11: Suspension Orders and the Impact on Creditors' Rights

Articles & Publications

July 2, 2020
By: Eric Monzo
ABI Journal

Eric J. MonzoThe June issue of the American Bankruptcy Institute Journal includes the article, “COVID-19 and Chapter 11: Suspension Orders and Their Impact on Creditors' Rights,” authored by partner Eric J. Monzo of Morris James LLP.

The impact of the novel coronavirus, COVID-19, on chapter 11 cases continues to develop, and courts have responded to this crisis in myriad ways. As a result, the dire tension between debtors and general unsecured creditors has and likely will continue to be affected, and it is unclear whether the pandemic’s fallout will have long- term repercussions on this relationship. Stay-at- home measures have resulted in many businesses shuttering or limiting operations, and unprecedented reactions have been seen from debtors and courts in an effort to counter the ill effects on debtors in existing chapter 11 cases, which found their restructuring planning shaken because of the virus’s global impact. As a result, debtors and courts are attempting to adjust to find new and creative remedies within the Bankruptcy Code to preserve the value of their businesses. 

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