Middlebrooks Shapiro, P.C.

Most U.S. businesses have dealt with SBA-backed loans and, when there's a default, bankruptcy and non-bankruptcy options should be considered. #sbaloans #sbadebt #sba

Many of our clients want to "workout" SBA debt that is burdening their small business. So what is a SBA debt "workout"? It's actually defined in the SBA's "Standard Operating Procedure": "The term 'workout' refers to the Loan collection and negotiation process as well as the final plan agreed upon by a Lender and Borrower to 'workout' or resolve the problems and/or issues involving the Borrower’s delinquent obligations on an SBA Loan. Generally, a workout agreement materially restructures the terms and conditions of a Borrower’s delinquent SBA Loan in order to: - avoid the need for actions such as foreclosure or bankruptcy; - enable the Borrower to cure Defaults and improve repayment ability; and - enable the Lender to maximize recovery on the Loan. Because a workout agreement materially alters the terms and conditions of the Loan, the Loan will need to be purchased from the secondary market investor before a formal workout agreement is executed. Whenever feasible, Lenders must make a good faith effort to negotiate a workout on an SBA Loan that is seriously delinquent or classified in liquidation." Check out the Procedures here: https://lnkd.in/ebnsngey

Check out "The Businessperson’s Practical Guide to Chapter 11" by Kenneth A. Rosen for a great overview of Chapter 11 bankruptcy and related issues. https://lnkd.in/eRw9dScU

More and more we talk to businesses who are struggling with Merchant Cash Advances (MCAs). It's important to understand what MCAs are; we'll continue to explore the topic of MCAs in future posts.

Franchise business bankruptcies have been in the news cycle. In the last year, many large franchise businesses have sought bankruptcy protection. In the attached article, we outline franchisee business bankruptcy issues. #bankruptcy #franchisee #franchise #franchisebankruptcy

Please join the New Jersey State Bar Association Cannabis Law Special Committee on April 30th, 2024 from 9 AM to 4:05 PM for a symposium on the Latest Developments in Cannabis and Psychedelics Law with Joshua S. Bauchner, Partner and Chair of the Cannabis, Hemp, and Psychedelics Practice Group at Mandelbaum Barrett PC. Earn up to 6.9 credits, including 0.7 in ethics as you gain invaluable insights to navigate the dynamic landscape of cannabis law, essential for enhancing your practice. Please register at: https://lnkd.in/ePzUqCCj Joining Joshua are presenters: Brittany Ann Bonetti, Esq. Cooper Levenson, Attorneys at Law, P.A., Atlantic City Duncan Delano, Esq. Emerge Law Group, Newark Valisha Desir, Esq. The Glory Firm, Springfield Lisa Gora, Esq. Epstein Becker & Green, P.C., Newark Mollie Hartman Lustig, Esq. McLaughlin & Stern, LLP, Westfield Beau Huch, Esq. Porzio, Bromberg & Newman, P.C., Morristown Matthew Miller, Esq. Lerner David, Cranford Ronald Mondello, Esq. RONALD P. MONDELLO, P.C., Fair Lawn Sarah Powell, Esq. Florio Perrucci Steinhardt Cappelli & Tipton LLC, Easton Joseph Shapiro, Esq. Middlebrooks Shapiro, P.C., Springfield Seth R. Tipton, Esq. Florio Perrucci Steinhardt Cappelli & Tipton LLC, Easton David White, Esq. Pashman Stein Walder Hayden P.C., Hackensack John D. Williams, Esq. Law Office of John D. Williams, Newton #NJSBA #CannabisLaw #PsychedelicsLaw #LegalSymposium #CannabisIndustry #PsychedelicsIndustry #LegalDevelopments

At our Firm, we increasingly handle Chapter 11 bankruptcy reorganizations for businesses and individuals arising from Merchant Cash Advances (MCAs). Our Firm has handled Chapter 11 bankruptcy reorganizations for a range of clients who all share one (1) thing in common; their cash flow has been levied by MCA companies. While MCAs are advertised and sold as convenient solutions for a business' immediate cash flow needs, they frequently cause businesses and their owners distress. In short, while MCAs are often legally valid and enforceable, to a small business, they appear to embody predatory lending practices which exploit their need for short term cash flow. #mca #chapter11bankruptcy #newjerseybankruptcy #njbankruptcy

Yesterday, Middlebrooks Shapiro, P.C. confirmed another Chapter 11 bankruptcy plan of reorganization in the U.S. Bankruptcy Court for the District of New Jersey. Our client, a restaurant, was on the brink of closure due to merchant cash advance (MCA) liens on its cash collateral (its receivables i.e. cash flow). It also required assistance to address outstanding tax debts and various other general unsecured debts. At the start of the Chapter 11 case, our client used an emergency motion to approve interim use of cash collateral to stop the various levies on its receivables, which was granted, and which freed up our client's cash flow so that it could begin to operate again. A final order on use of cash collateral was later entered, permitting our client to continue to operate during the course of the bankruptcy using that levied cash flow to operate post-petition. During the Chapter 11 case, our client also moved for Court approval of its entry into a new, extended lease with its landlord of the property where it operates it business. The Court approved that motion, and our client was authorized to enter into this new lease, which ensured its continued operation at its existing location, and prevented potential loss of its business and/or significant expense required to locate a new property. During the confirmation process, the Court approved the adequacy of our client's Disclosure Statement and, after our client solicited votes for its Plan, it obtained ballots from two (2) impaired classes accepting the Plan. After working with counsel to a taxing authority to fine-tune the language in the proposed Confirmation Order, and with the consent of the Office of the United States Trusteee, the Court entered the Confirmation Order. Under the confirmed Plan, our client will make interim distributions on all allowed claims, which are all to receive 100% distributons over the term of the Plan, including to taxing authorities on both pre- and post-petition priority claims. Our client is now emerging from Chapter 11 with a new, extended lease in place, and with the freedom and confidence to operate its business without risk to its cash flow. The net result is 100% distributions to all creditors with allow claims, which is a win-win result for both our client and its creditors. #reorganization #bankruptcy #chapter11 #chapter11bankruptcy #litigation #newjerseybankruptcy #njbankruptcy