Bloomberg Law

With each passing day of coronavirus-related shutdown and reopening, corporate leaders are increasingly uncertain about the impact the virus will continue to have on their businesses. Amid the fragile economic environment of a global pandemic, the most informed C-suite executives are strategizing and considering all of their options-including reorganization.

Filing under chapter 11 of the bankruptcy code in the wake of Covid-19 could present an opportunity for a company to emerge from an unprecedented pandemic with a business plan that is in step with the world's "new normal." From the outset, a CEO's understanding of the most critical pieces of the bankruptcy process can place a company on a successful trajectory. Some will use this time as an opportunity to drive consolidation through bankruptcy sales. Others will use chapter 11 as a buttress against aggressive lenders while the world returns to normal. No matter how familiar a CEO may be with the bankruptcy process, consideration of the five following areas will better prepare the company for an effective reorganization.

Taking Care of Your People

Employee wages

In the context of a chapter 11 bankruptcy case, keeping the business running is the first area of focus. Retention of the labor force is the foundation for continuing operations. Aside from the ordinary pressures of keeping employees happy and productive, major concerns in any chapter 11 case include ensuring the payroll is paid on time and employee benefits are maintained.

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