The coronavirus pandemic is the most devastating disease to hit the world since the 1918 flu. Thousands of people have died, and millions more have seen their lives disrupted. Experts are predicting that it may take years for things to go back to “normal.” However, it is becoming increasingly clear that there is no universally agreed-upon definition of “normal,” particularly in the business world.
COVID-19’s Impact On Business
We have all made changes in our personal lives to protect ourselves and others from spreading this deadly virus. Lost in the focus on canceled social events and binge-watching tv is a recognition of how drastically our work lives have changed as well.
Staff has been cut so only essential employees are in the office. Some businesses are discovering that nonessential employees really are nonessential, and those people may never be hired back.
Businesses have embraced telework, which may never have become the norm otherwise, but is now showing its value. The line between work time and leisure time is growing ever more blurry.
The government has forcibly closed a number of businesses. Owners wonder whether consumers will ever return after discovering they can do without, or find similar products and services online.
A New Normal
When all this is over, normal is going to look very different thanks to these and other changes. At Hanson & Payne we are prepared to help businesses in the Milwaukee area adjust to the new normal. We believe bankruptcy will be an important tool for many companies adjusting to post-corona life.
Bankruptcy Is A Tool
Bankruptcy is often used by struggling businesses to restructure and get back on their feet. Chapter 11 of the bankruptcy code was specifically designed for this purpose.
Chapter 11 is used by companies who are not ready to throw in the towel just yet. While a Chapter 11 case is pending, a filer has the freedom to attempt to negotiate new contracts with creditors, landlords, and labor unions. Negotiations like these are going to be particularly important as businesses struggle to get back up and running at full capacity.
A company may also use Chapter 11 as an opportunity to settle pending litigation if it is facing unknown liability. The fear that the business will completely shut down if negotiations are unsuccessful gives the filer some leverage and motivates everyone to make a deal.
Contrast this with a Chapter 7 bankruptcy, where the goal is winding down operations. Assets are sold off, creditors paid whatever is possible, and then the business is shuttered. There is no attempt to keep the business going, even though parts of it might be profitable if they are sold off.
Milwaukee’s Bankruptcy Firm
Hanson & Payne, LLC is a trusted advisor to businesses in the Milwaukee area. We have a reputation for being business-minded in an industry that is often criticized for not understanding that legal action is a means to an end, not an end in and of itself. If you are looking for legal counsel in this challenging time, we would be honored to take your call. Contact us today to schedule an initial consultation.