Preferences & Chapter 7 Bankruptcy Filings

PLEASE NOTE THAT EFFECTIVE IMMEDIATELY, PLEASE USE 917 363 3391 TO CONTACT JIM SHENWICK, ESQ.

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The New York Post recently had an article about a New York bankruptcy trustee who has ordered dozens of former sales reps at Worth Collection (an upscale, New York-based women’s apparel label that filed for chapter 7 bankruptcy three years ago) to return tens of thousands of dollars in commissions they earned shortly before the company’s bankruptcy filing. The article can be found at https://nypost.com/2023/03/30/bankrupt-nyc-fashion-labels-sales-reps-ordered-to-return-commissions/?utm_source=gmail&utm_campaign=android_nyp

The article states that stylists who worked as independent contractors for Worth Collection  (which catered to professional women at trunk shows that were typically held at the stylists’ homes or showrooms) were ordered to repay  the earned commissions by a US Bankruptcy Trustee.

In the way of background, when a company files for chapter 7 bankruptcy protection, a bankruptcy trustee is appointed to close the business, liquidate the business’s assets, and distribute those monies to creditors. 

The bankruptcy trustee will review the company's financial statements, bank statements, check registers, and tax returns to determine if preferential payments or fraudulent conveyances were made. If  those payments occurred, then the bankruptcy trustee will commence lawsuit(s) (called Adversary Proceedings in bankruptcy parlance) to recover those monies.

While not actually stated in the article, it is this author’s opinion that the bankruptcy trustee’s action against the stylists was for preferential payments, i.e., payments made to the stylists on account of antecedent debts (old debts) within 90 days of Worth Collection’s chapter 7 bankruptcy filing. 

Additionally, unless the bankruptcy filing  was an involuntary bankruptcy filing, the company could have delayed their bankruptcy filing  by 90 days, to have prevented the bankruptcy trustee's preference actions against the stylists.

For this reason, whenever we advise a company to consider filing for chapter 7 bankruptcy, we discuss preference issues with management and the owners, review bank statements, and check registers for preference issues. 

Individuals or businesses with preferences can contact Jim Shenwick, Esq., for a consultation.

 

Jim Shenwick, Esq. 917 363 3391  jshenwick@gmail.com

We help individuals and companies with too much debt!

 

 

 

Can you get a small business loan after bankruptcy?

 Bankrate has a very interesting and informative article about whether a small business can get a small business loan after bankruptcy? 

The article states that getting a small business loan after going through bankruptcy is possible, but it can be a challenge. At Shenwick & Associates we have found that individuals can obtain credit 6 months to 1.5 years after filing for personal bankruptcy and approximately 2 years for businesses. The article can be found at https://www.bankrate.com/loans/small-business/business-loan-after-bankruptcy/

Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com  

We help individuals and businesses with too much debt!

 Yahoo Finance is reporting that 

Small businesses are filing for bankruptcy at a higher rate than at the peak of the pandemic - and a looming credit crunch could make things worse

The article can be found at https://uk.finance.yahoo.com/news/small-businesses-filing-bankruptcy-higher-180500570.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAWlcxq9eBw_EDH7SdbAwnf1p2vjy9R8T0I8s4z4TnAtWnfO5kbavPqyksi41EXY1qr-fv6bxeTLbWn3joCZdgqwyT46sHywfwRVYXeMQGd3nC2Gv3-R4xjNgB5GyJlT46RjQ5vRtKcvEazFBSjLY9VD8sE92flvSydqJ2EmdHxv

Jim Shenwick, Esq.  917 363 3391  jshenwick@gmail.com 

We help individuals & businesses with too much debt!

Rising number of Americans choose bankruptcy to deal with unmanageable debt: report

A Fox 13 Report states that  "A growing number of Americans, still reeling from the financial strain of the COVID-19 pandemic, are no longer benefiting from government relief efforts and are increasingly choosing bankruptcy to deal with unmanageable debt, according to a recent American Bankruptcy Institute (ABI)"

The article can be found at  https://www.q13fox.com/news/more-americans-choose-bankruptcy-debt-report

At Shenwick & Associates we held individuals & companies that have too much debt!

To schedule a telephone call with Jim Shenwick, Esq 

Please click the link to schedule a telephone call with me.

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Bankruptcy Fraud is a Crime and People Who Commit Bankruptcy Fraud can be Arrested and Serve Time in Jail if Convicted

 

Bankruptcy Fraud: Former Attorney From Westchester Lied To Keep Home, Sports Car, Officials Say and was Arrested

https://dailyvoice.com/new-york/scarsdale/news/bankruptcy-fraud-former-attorney-from-westchester-lied-to-keep-home-sports-car-officials-say/860005/?emh5=07d29e82d0d168c807e94007ee2a9bb2&emh256=455e752c66fb0d80f8fdcfa65fb0e36b493bf4cfb8a38c283b91f42bb186af86&emsid=22110&lctg=eOjmpoXsZr8tCTDKSplgXx2UI88UKyCe&utm_source=daily-email&utm_medium=email&utm_campaign=daily-scarsdale-260059&group=0&test_id=None

Lying in Bankruptcy Court is a crime and people who commit that crime can be arrested and imprisoned. Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com

We help people & companies who have too much debt!

Please click the link to schedule a telephone call with me.

https://calendly.com/james-shenwick/15min

Federal Government Bailout Packages for Small Businesses: What You Need to Know - TDPel Media

 TDPelmedia has an article about bailout packages for small business. The article can be found at

https://tdpelmedia.com/federal-government-bailout-packages-for-small-businesses-what-you-need-to-know/

At Shenwick & Associates we help many clients with too much debt or not enough capital.

Jim Shenwick, Esq.   917 363 3391  jshenwick@gmail.com

Please click the link to schedule a telephone call with Jim Shenwick

https://calendly.com/james-shenwick/15min

Jim Shenwick, Esq Commercial Leasing Biography in Manhattan New York City

 ● Jim Shenwick, Esq has  a specialty in commercial leasing (he has represented over 300 tenants and landlords in commercial lease negotiations).   

●Representative Manhattan transactions include the following: (a) represented over 250 commercial tenants representing office space in Manhattan, New York City.

●Represented a Landlord who leased retail space to a Gap store in Midtown East, (b) Represented a Landlord who leased space to a coffee chain in the East 20’s, (c) Represented a private equity fund that leased office space in 7 Time Square Tower, (d) Represented a hedge fund that leased office space at 590 Madison Avenue, (e) Represented an Internet social marketing company that leased space on 23^rd Street, (f) Represented a Landlord in Soho who leased space to a restaurant and food store, (g) Represented  an art gallery that moved to the West 26^th Street art district (h) Represented a hair transplant doctor who leased space for an upscale hair transplant facility on Madison Avenue and (i) Represented a chain of pizza stores who leased space throughout NYC and Long Island,

● Jim Shenwick, Esq. has written on the assignment/subletting of commercial leases, questions tenants need to ask Landlords before signing a commercial lease, “silent” commercial lease issues not dealt with in standard lease forms and hidden costs in commercial leases.  

● Jim Shenwick, Esq. also spoke at the Association of the Bar of the City of New York on commercial leasing issues for tenants.

 At Shenwick & Associates, we have represented more than 300 tenants in commercial leasing transactions, including office tenants, restaurants & retain stores.  Any clients having questions about commercial leases should contact Jim Shenwick, Esq.   jshenwick@gmail.com  917 363 3391  

Please click the link to schedule a telephone call with Jim Shenwick

https://calendly.com/james-shenwick/15min

 

                                                            

Commercial Leasing Checklist in New York City Manhattan Part II

 

1.                  Tenant should be permitted signage (at no cost)  in building lobby directory, elevator, floor and door (window signage flag should be permitted for retail)

 2.                  Tenant should have the right to make deliveries to the premises at any time of the day for retail use

3.                  Sidewalk maintenance & repair should not the responsibility of the retail tenant, other than snow removal

 4.                  Prior approval of private carter for retail Tenant.

 5.                  Tenant not have to pay Landlord’s  expenses for initial renovation plan review

 6.                  Tenant's renovation plans should be approved by Landlord prior to Tenant signing the Lease                     and the standard of review by Landlord should be "NUW"-not unreasonably withheld.

 7.                  Water for sink and toilet should be provided at no cost to Tenant and bills for other water uses                    should be by direct meter.

 8.                  Heating should be provided to Tenant even if there is in default under the lease. 

 9.                  Vault taxes, if any should be the responsibility of Landlord not Tenant.

10.              Obtain a  copy of the c/o for the premises and review prior to signing the Lease.

11.              Insurance rider should be sent to insurance agent for review and comment before the Lease is signed. 

12.              Construction clause, if any must be sent to the Tenant's architect for review.

13.              Brokerage clause must represent who is paying the broker and the accompanying indemnification clause  must be mutual

14.              Real Estate tax increases, should be paid over 12 months by Tenant

 At Shenwick & Associates, we have represented more than 300 tenants in commercial leasing transactions, including office tenants, restaurants & retain stores. Provided below is Part I of our Leasing Checklist.  Any clients having questions about commercial leases should contact Jim Shenwick, Esq.   jshenwick@gmail.com  917 363 3391  

Please click the link to schedule a telephone call with Jim Shenwick

https://calendly.com/james-shenwick/15min

Commercial Leasing Checklist in New York City Manhattan Part I

 At Shenwick & Associates, we have represented more than 300 tenants in commercial leasing transactions, including office tenants, restaurants & retain stores. Provided below is Part I of our Leasing Checklist.  Any clients having questions about commercial leases should contact Jim Shenwick, Esq.   jshenwick@gmail.com  917 363 3391  

Please click the link to schedule a telephone call with Jim Shenwick

https://calendly.com/james-shenwick/15min

Lease Checklist:

 1.                  Free rent?   How much? Tenant should receive 12 months rent at first year rate before rent increases in second year.

 2.                  Are the premises in a land-marked building? (alterations are more difficult)

 3.                  Request a  copy of the most recent tax bill and Tenant should only pay its pro rata share of taxes

4.                  Is the electricity direct meter, sub-meter or rent inclusion?

5.                  Assignment and sub-let provisions should automatically be allowed: (a) Tenant’s sale of its business, (b) merger of its business, (c) Tenant goes public, (d) assignment of  its lease to a related entity or division

 6.                  Non-structural alterations should be allowed as a matter of right to Tenant

 7.                  Interest on security deposit should go to Tenant without request or notice once per year

and security deposit should be returned to Tenant 30 days after lease ends

 8.                  Landlord should expressly consent to Tenant's particular use and assist Tenant in getting a liquor license (for a bar or restaurant)

 9.                  If the premises have a sprinkler installation, who pays for monitoring, and maintenance?

 10.              What is the electricity capacity of the premises wiring? Landlord should make a representation in the lease to the electrical capacity and the capacity should be sufficient for Tenant's business (important for a manufacturing or service business).

Check our Blog for Part II of our Leasing Checklist

Jim Shenwick, Esq

What is Chapter 11 bankruptcy?

 Business Insider has a very helpful article on Chapter 11 bankruptcy. The article can be found

 at https://www.businessinsider.com/personal-finance/what-is-chapter-11-bankruptcy

Many people are not aware that individuals as well as businesses can file for chapter 11 bankruptcy and that chapter 11 bankruptcy can be used to reorganize businesses as well as to sell assets.

Jim Shenwick, Esq.   917 363 3391  jshenwick@gmail.com

We help individuals & companies with too much debt!

Please click the link to schedule a telephone call with Jim Shenwick

https://calendly.com/james-shenwick/15min

 

MOTLEY FOOL ARTICLE ON REPAYMENT OF SBA EIDL LOANS

 The Motley Fool has an article on the repayment of SBA EIDL Loans. The article is titled 
"Took Out a Small Business Loan During the Pandemic? You May Need to Start Paying It Back"
The article can be found at https://www.fool.com/the-ascent/small-business/articles/took-out-a-small-business-loan-during-the-pandemic-you-may-need-to-start-paying-it-back/
Any clients with questions about the repayment of SBA or EIDL loans should contact Jim Shenwick, Esq.  jshenwick@gmail.com   917 363 3391
"We held individuals & companies with too much debt!"

FOR MORE BLOG POSTS ABOUT SBA EIDL LOANS SEE:

EIDL LOAN WORKOUTS AND BANKRUPTCY

https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html

EIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.html EIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMISE https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html EIDL Defaulted Loans https://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.html New Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan" https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.html EIDL LOANS and SBA OFFER IN COMPROMISE PROGRAM https://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html PPP & EIDL Fraud https://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.html Better to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loans https://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html

Differences Between Chapter 7 and Chapter 13

 

IMCGRUP has an article on the "Differences Between Chapter 7 and Chapter 13 Bankruptcy. The article can be found at 
https://www.imcgrupo.com/difference-between-chapter-7-and-chapter-13-bankruptcy/
Jim Shenwick, Esq.  jshenwick@gmail.com  917 363 3391 
"We help people & monies with too much debt". 

Please click the link to schedule a telephone call with me.
 https://calendly.com/james-shenwick/15min

Chapter 11 Bankruptcy Filings Increase 83%

 

Chapter 11 Bankruptcy Filings Increase 83% Y/Y in February 2023  based on article in Monitor Daily. See  https://www.monitordaily.com/news-posts/chapter-11-bankruptcy-filings-increase-83-y-y-in-february/

Jim Shenwick, Esq.  917 363 3391  jshenwick@gmail.com

We held individuals & companies with too much debt!

Please click the link to schedule a telephone call with me.
 https://calendly.com/james-shenwick/15min

How student loan debt became a trillion-dollar problem for Americans

 See the post at https://www.cnn.com/2023/02/27/politics/us-student-loan-debt-timeline/index.html

Jim Shenwick, Esq.  917 363 3391   jshenwick@gmail.com

At Shenwick & Associates we help people and businesses with too much debt!

Please click the link to schedule a telephone call with me.

https://calendly.com/james-shenwick/15min

Falling behind on federal student loans can lead to other major financial problems according to CNBC

 

Falling behind on federal student loans can lead to other major financial problems

A story on CNBC reports that "more than 80% of borrowers who experienced default stated that they’d faced at least one additional consequence as a result. The most common impact was a drop in their credit score (62%) followed by being subject to collection fees (47%) and losing eligibility for future federal financial aid (37%)."

The story can be found at 

https://www.cnbc.com/2023/02/22/falling-behind-on-student-loans-can-lead-to-other-financial-problems.html

We help individuals & businesses with too much debt!

Jim Shenwick, Esq   917-363-3391   jshenwick@gmail.com

Office Landlord Debt Defaults Rising as Remote Work Takes Hold

The New York Post is reporting that “A growing number of office landlords are defaulting on loan payments as the rise of remote work causes more corporate tenants to rethink long-term leases". The story can be found at https://nypost.com/2023/02/21/office-landlord-debt-defaults-rise-as-remote-work-takes-hold-report/?utm_source=gmail&utm_campaign=android_nyp  

If New York City office landlords are defaulting on their mortgages, should commercial tenants in New York City with surplus space due to remote work or the recession also be asking for concessions such as a reduction in base rent or additional rent or seek to exit or terminate their leases? 

At Shenwick & Associates, we believe they should be, and we have helped many commercial tenants surrender, exit, or terminate their leases. We also work with their good guy guarantors to reduce or eliminate their exposure.

We recently helped a garment center company surrender their lease on very favorable terms and the post can be found at https://shenwick.blogspot.com/2023/01/office-lease-closing-termination-or.html

Jim Shenwick Esq. has office leasing, bankruptcy & workout experience and an LLM in Taxation from NYU Law School.  "Jim Shenwick, Esq helps individuals & businesses with too much Debt!"

Relief of Indebtedness Income and Workouts under Section 108 of the Internal Revenue Code

 Relief of Indebtedness Income and Workouts under Section 108 of the Internal Revenue Code.

Shenwick & Associates performs many workouts for clients, and one point that is often overlooked during negotiations is relief of indebtedness income. 

Section 108 of the Internal Revenue Code provides that income from discharge of indebtedness is income to the Debtor, unless otherwise provided for in that section.

 The following example illustrates the point: If a debtor owes a creditor $100,000.00 and the creditor agrees to accept $50,000.00 as payment for that debt, the debtor has been enriched by the sum of $50,000.00 and the Debtor must report $50,000 of income on its tax return.

Answers to many relief of indebtedness income questions are provided below:

1. Question: Do creditors really report relief of indebtedness income to the IRS?

Answer: Yes they do and the income is reported on IRS Form 1099-C

2. Question: Which creditors report income to the IRS? 

Answer: All banks and financial institutions do. Landlords, hospitals and trade vendors generally do not report relief of indebtedness income, although they should.

     3. Question: Is the income ordinary income or capital gain? 

Answer: Sadly, it is ordinary income.

     4.  Question: Is relief from indebtedness income recognized by the guarantor of a debt?

            Answer: The IRS generally holds that a guarantor (whether or not the primary obligor has defaulted and the guarantor has become liable for the indebtedness) does not realize relief of indebtedness income on release of a liability. IRC 108(e)(2)

5. Question: Do I have to recognize relief of indebtedness income if I file for bankruptcy?

Answer: No. See section 108(a)(1)(A) of the Internal Revenue Code. This is why many debtors elect to file for bankruptcy rather than do a workout.

6. Question: If I am insolvent (my Liabilities exceed my Assets also known as the Balance Sheet test) do I have to pick up relief of indebtedness income?

Answer: No. See section 108(a)(1)(B) of the Internal Revenue Code

7. Question: What if I am a member, partner, or shareholder of a company that defaults on an unpaid debt? 

Answer: A member, partner, or shareholder of an LLC, partnership, or S corporation (a pass-through entity) must report income unless an exception applies.

Clients or their advisors with questions regarding relief of debt income should contact Jim Shenwick, Esq.   jshenwick@gmail.com   917 363 3391

 "We held individuals and businesses with too much debt!"

SDNY Revisits Section 502(b)(6) Cap on a Landlord’s Claim for Rejection Damages

 

Judge Wilde's, a Bankruptcy Judge Revisits the Rent Cap Calculations allowed a Landlord under Section 502(b)(6) of the Bankruptcy Code. The article can be found at jdsupra at https://www.jdsupra.com/legalnews/sdny-revisits-rent-cap-calculations-a-8004543/?origin=CEG&utm_source=CEG&utm_medium=email&utm_campaign=CustomEmailDigest&utm_term=jds-article&utm_content=article-link

Jim Shenwick, Esq.  jshenwick@gmail.com   917 363 3391

"We held individuals and businesses with too much debt!"

WE HELP INDIVIDUALS & BUSINESSES WITH TOO MUCH DEBT! PLEASE CLICK THE LINK BELOW TO SCHEDULE A TELEPHONE CALL WITH JIM SHENWICK, ESQ.

   https://calendly.com/james-shenwick/15min

Crypto In Bankruptcy: Tax Apocalypse For Celsius Customers?

 Garrett L. Brodeur at Kostelanetz has published a very informative article on crypto and related tax and bankruptcy issues. The article can be found at https://kflaw.com/crypto-in-bankruptcy-tax-apocalypse-for-celsius-customers/

The article touches on many important bankruptcy and tax issues related to cryptocurrency in the Celsius case and other crypto cases.  Jim Shenwick, Esq.  917-363-3391  jshenwick@gmail.com 

WE HELP INDIVIDUALS & BUSINESSES WITH TOO MUCH DEBT! Please click the link to schedule a telephone call with me.

  https://calendly.com/james-shenwick/15min

Client Review from Melissa ________ January 29, 2023

 "Jim was a tremendous help in sorting through a complex corporate structure and personal finance situation. Not only did he help with 3 separate bankruptcy filings, but he advised and appeared as needed in state court litigation and kept us calm during a nearly 5 year-long process and a very emotional time.  We are so grateful for his counsel and support and the successful outcomes he achieved for us."

 

What You Need To Know About Buying A Home After Bankruptcy

 HouseDigest.com has an excellent article about What You Need To Know About Buying A Home After Bankruptcy. The article can be found at   https://www.housedigest.com/1179558/what-you-need-to-know-about-buying-a-home-after-bankruptcy/

Jim Shenwick, Esq has helped many bankruptcy filers rehabilitate their credit after a bankruptcy filing so they can purchase houses or lease automobiles.  Jim Shenwick, Esq  jshenwick@gmail.com  917 363 3391

Schedule a telephone call with Jim Shenwick, Esq

Please click the link to schedule a telephone call with me.

 https://calendly.com/james-shenwick/15min

SBA EIDL Loan Repayments have Commenced according to an article in abc 11

Beginning in January 2023, millions of small businesses will have to budget for a new monthly expense. During the pandemic, federal loans granted to small businesses will begin repayment, according to a story at  https://abc11.com/small-business-ppp-loans-pandemic/12721676/

Many small businesses will now have to begin repaying their SBA EIDL loans despite a difficult business environment, including high interest rates and inflation. This may result in many businesses filing for chapter 7 bankruptcy or closing. Jim Shenwick, Esq  jshenwick@gmail.com   917 363 3391

FOR MORE BLOG POSTS ABOUT SBA EIDL LOANS SEE:

EIDL LOAN WORKOUTS AND BANKRUPTCY

https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html

EIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.html EIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMISE https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html EIDL Defaulted Loans https://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.html New Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan" https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.html EIDL LOANS and SBA OFFER IN COMPROMISE PROGRAM https://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html PPP & EIDL Fraud https://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.html Better to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loans https://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html

Party City files for Bankruptcy with plans to restructure mounting debt-is the party over?

Party City files for Bankruptcy with plans to restructure mounting debt-is the party over?

CNBC is reporting that Party City has filed for Bankruptcy protection. The story can be found at 

 https://www.cnbc.com/2023/01/18/party-city-files-for-bankruptcy-to-restructure-piling-debt.html

Jim Shenwick, Esq.   212 541 6224  jshenwick@gmail.com

Another Crypto Company Genesis Files for Bankruptcy

 

Genesis, a Crypto Lending Firm, Files for Bankruptcy according to the New York Times. The article can be found at   

https://www.nytimes.com/2023/01/20/technology/genesis-bankruptcy-crypto.html

Jim Shenwick, Esq.  212 541 6224   jshenwick@gmail.com

Social Security benefits can be taken to pay student loans in default

Many individuals are not aware that Social Security benefits can be used to pay student loans that are in default. The Social Security Administration (SSA) can take up to 15% of a persons benefits to pay off defaulted student loans; however, it cannot take more than $750 a month or $9,000 a year to pay for defaulted student loans.

For further details see the Fox Business article at https://www.foxbusiness.com/personal-finance/student-loans-default-diminish-social-security-benefits

Regrettably these defaults often impact retired parents who have taken out student loans for their children or Parent Plus Loans.

Jim Shenwick Esq.   212 541 6224   jshenwick@gmail.com 

Millions of Businesses Need to Start Paying Back Coronavirus Loans

The Toledo Blade is reporting that millions of businesses need to start paying back coronavirus loans. The article states that nearly 3.8 million small business owners took out Economic Injury Disaster Loans (known as EIDL loans) from the federal government, averaging roughly $100,000 per loan, according to the Small Business Administration. These 30-year loans carry an interest rate of 3.75 percent for businesses and require repayment.

The first EIDL loan monthly payments will commence in January 2023 and the article reports that 2.6 million businesses across the country will owe money by that date.

The article can be found at https://www.toledoblade.com/business/development/2023/01/14/businesses-pandemic-paying-back-coronavirus-loans/stories/20230114082

Jim Shenwick, Esq.   jshenwick@gmail.com   212 541 6224

Office Lease Closing, Termination, or Surrender in New York City

 Office Lease Closing, Termination, or Surrender in New York City 

As many readers of our emails and blog are aware, at Shenwick & Associates we are helping many small businesses close, terminate or surrender their office leases in New York.

 

As a result of the cooling labor market, many industry experts predicted employers would have more leverage to force their employees back to work. However, with the recession and troubled economy in New York City, we are seeing more and more small businesses close their offices and surrender, abandon or terminate their leases to cut costs.

 

A recent study by a Columbia business professor stated that to provide a seat for an employee in Manhattan costs the employer  $16,000 per year. It is important to note that the Columbia business professor referred to a "seat" rather than an "office". Providing an office for every employee would cost substantially more than $16,000 per year.

 

We were recently retained by a small garment center company that was struggling and wanted to move to a remote work structure to save business and money. The facts of the case are interesting and illustrative: the company owed $65,000 in rent and additional rent to its landlord. For them to be released from the guaranty, they needed to give the landlord three months notice and be current on their rent (total amount owed to landlord over $100,000). 

Jim Shenwick, Esq. was retained by the company and we reviewed the commercial lease, the guaranty, the financials' for the company and the guarantor. 

We formulated a strategy and negotiated a very favorable deal for our client. 

As part of the agreement, the tenant vacated the space quickly, abandoned its buildout to the landlord, forfeited its security deposit, and paid the landlord $25,000. The landlord agreed to release the company and the guarantor.

The result  was a "win/win" for all parties,  the landlord obtained possession of its space quickly without incurring legal fees and court costs, the company saved approximately $75,000 in rent payments and the guarantor was not sued and did not have to file for bankruptcy.

 

Jim Shenwick, Esq has experience in commercial leasing, workouts and bankruptcy and clients can contact him at 212 541 6224 or jshenwick@gmail.com  

 

Excerpts from the Elon Musk story are below.

Elon Musk, who was a skeptic of the benefits of remote work, recently announced that he was closing the Twitter offices in Seattle.  The Seattle Times had a fascinating article about musk's move, the article can be found at https://www.seattletimes.com/opinion/musks-about-face-on-remote-work-shows-its-value-in-recession/

 

The article stated in part that "As part of ongoing cost-cutting measures under new owner and CEO Elon Musk, Twitter is shutting down its Seattle offices and instructing employees to work remotely. That’s despite Musk earlier claiming that remote workers are only “pretending to work” and banning remote work at Twitter upon taking it over in early November.

So what explains his change of heart? Apparently, it’s the costs associated with the company’s Seattle office: rent and services such as cleaning and security.

The fact that Musk — an extreme skeptic of remote work — acknowledged its cost-cutting benefits illustrates the future of remote work for the U.S. economy. It highlights the misleading nature of many headlines about how an impending recession would lead to the end of remote work. 

They claim that a cooling labor market will give executives more control to require employees to return to the office. That’s because many employees prefer to work remotely and most executives want their employees in the office.

However, the reality is much more complex. Of course it’s true that during a recession, employers have more leverage. At the same time, executives need to focus on maximizing the return on investment from their employees.

In times of economic growth, executives have more freedom to make decisions based on their personal preferences and intuitions. But during a recession, they may need to hunker down, be more disciplined, and rely on data to make decisions that make the most financial sense for the company — like Musk choosing to have Twitter staff work remotely for the sake of cutting costs. This focus on profitability over personal preferences benefits remote work."

Jim Shenwick, Esq jshenwick@gmail.com 212541 6224

What to Know About Biden’s Income-Driven Repayment Proposal

 The New York Times has an article about "What to Know About Biden’s Income-Driven Repayment Proposal". The story can be found at https://www.nytimes.com/2023/01/10/your-money/student-loans-income-driven-repayment.html.

The Income-Driven Repayment Proposal would tie a  borrowers’ monthly payments for their student loan debt to their income and family size, and after a set number of years, any remaining debt is forgiven.  

Jim Shenwick, Esq.  212 541 6224  jshenwick@gmail.com

US Bankruptcy Court Rules Celsius Deposits Belong to the Firm

 

US Bankruptcy Court Rules Celsius Deposits Belong to the Firm. This story can be found at  the bitcoin website at https://news.bitcoin.com/us-bankruptcy-court-rules-celsius-deposits-belong-to-the-firm/

There ruling is bad news for people or companies who had deposits at Celsius, but may be good news for Celsius' unsecured creditors. 

At Shenwick & Associates, we are helping creditors file Proof of Claim in the Celsius and FTX cases.  Jim Shenwick, Esq   212 541 6224  jshenwick@gmail.com

Bed Bath & Beyond ("BBB") Warns of Potential Bankruptcy

The New York Times has an article that warns about a bankruptcy filing by Bed Bath & Beyond. The article can be found at https://www.nytimes.com/2023/01/05/business/bed-bath-beyond-bankruptcy.html

Landlords and creditors who are owed money by BBB, should take appropriate action prior to a bankruptcy filing by BBB. Landlords and creditors who are owed money by BBB should contact a bankruptcy attorney as soon as possible. Jim Shenwick, Esq   jshenwick@gmail.com  212-541-6224

DYING OUT ‘Retail apocalypse’ warning after legendary retailer begins 100 store closures with Kohl’s & Nordstrom ‘under pressure’

The Sun is reporting that over 100 retail stores will close in 2023. The article can be found at 

 https://www.the-sun.com/money/7035971/retail-closures-kohls-nordstrom-under-pressure/

Suppliers to these chains should proceed with caution. Jim Shenwick, Esq  212-541-6224  jshenwick@gmail.com

FTX customers are reportedly taking huge losses on their outstanding investments so they don't have to wait months for bankruptcy claims

 Yahoo is reporting that many FTX creditors are selling their Proof of Claims. The story can be found at https://finance.yahoo.com/news/ftx-customers-reportedly-taking-huge-201238856.html

At Shenwick & Associates, we helping many clients file Proofs of Claim. 

Jim Shenwick, Esq   jshenwick@gmail.com  212 541 6224