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Chapter 7 death knell for smaller companies now has shortcut to Chapter 11 survival

Bankruptcy law changes passed just in time; will trucking companies use them?

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Just in time for what is almost certainly going to be a rush of bankruptcies in the trucking sector, two changes in federal bankruptcy law are set to potentially keep more companies alive that might have faced liquidation in the past.

The changes, discussed last week on the Drilling Deep podcast with attorney Matt Ferris of the law firm of Haynes & Boone, were rolled out in February in a fortuitous piece of timing: just as the COVID-19 pandemic raised the prospect of pushing a likely enormous number of companies, including trucking firms, into liquidation under Chapter 7 of the Federal Bankruptcy Act.

But the Small Business Reorganization Act (SBRA), passed last year in a rare display of bipartisanship and signed by President Donald Trump, went into effect Feb. 19. Soon after, as Congress passed and the president signed the CARES Act for pandemic relief, the provisions in the SBRA suddenly were opened to an even larger number of troubled companies.

What the SBRA does is make the Chapter 11 process in bankruptcy law easier, cheaper and available to smaller companies. And what the expansion in the CARES Act did was allow companies with an even bigger debt load than what was in the original SBRA law to seek relief under its provisions.

Under the original SBRA, a company could use its provisions if it had a debt load up to $2.7 million. (Debt above that threshold would bring a company into the usual provisions of Chapter 11.) Under the expansion of SBRA provisions, that number goes up to $7.5 million.

(A piece about the new law in the National Law Journal noted that the higher ceiling allowed by CARES is only good for a year before it reverts back to its approximately $2.7 million level). 

“SBRA is aimed at simplifying the bankruptcy process for small businesses by increasing efficiency, lowering costs, and easing the plan confirmation process,” Scott Ugell, a New York state-based attorney, wrote of the changes in a recent issue of the Rockland County Business Journal. “It could mean the difference between weathering the storm or having to close one’s doors and liquidate one’s assets. This statute was a great idea before the economic tsunami we are experiencing but now it is a real blessing.”

Companies that are looking for protection under SBRA are actually filing under Chapter 11. Chapter 11 is designed to reorganize a company with the agreement of its debtors and allow it to continue in a new corporate structure that can take a wide variety of forms. 

But Chapter 11 has always been expensive and complicated. For a smaller company, that usually means a trip through bankruptcy court and liquidation under Chapter 7. A smaller trucking company would fit that description.

“The cost of the process can be prohibitive for companies of a certain size,” Ferris said in his Drilling Deep interview. “The practical result is that many companies are forced to go the Chapter 7 route, which means they have to liquidate their assets and cease operations.”

Ferris said the SBRA cuts a lot of costs in the process and therefore opens the door to a Chapter 11 process in place of the more company-killing Chapter 7. “The act makes it possible for companies that would not otherwise have been able to avail themselves of Chapter 11 to actually go in and reorganize and be operating their business once they emerge from bankruptcy,” he said.

The consensus among attorneys who have written about the SBRA is that the elimination of a creditors’ committee for smaller companies filing under the law is a significant boost. 

In a chapter 11 action, a creditors’ committee is formed to represent the debtor’s unsecured creditors. It will then hire advisers and lawyers and incur other costs. All those costs are billed to the debtor.

Joseph Ammar of the law firm of Miller Canfield, writing in the Michigan Bankruptcy Journal last year, said that as a result of that change, “costs and procedural burdens should be reduced with no creditors’ committee.” He also cited the law’s elimination of a requirement for a debtor to post a “disclosure statement,” which requires a significant amount of data.

Ferris, describing the changes in the law, said another of the most significant changes under SBRA is that companies filing under it will avoid the “absolute priority rule.” Under current practice in Chapter 11, “as you move down the capital stack, the lowest rung can’t keep anything under a plan unless the rung above that is getting paid in full.”

At the bottom of most Chapter 11 filings are the equity holders, who in the bankruptcy of a publicly traded corporation would be shareholders. 

“So what that means in a lot of small companies, the owner of the company who built this into a meaningful business is not able to keep the company through Chapter 11 unless they can come up with a new capital contribution,” Ferris said.

That is often impossible. But Ferris said that under the new law, “this rule doesn’t exist, so even if unsecured creditors are not getting paid in full, the equity owner can keep their equity.”

The question arises: Why would a company not take advantage of the provisions under SBRA instead of going the Chapter 7 liquidation route?

The SBRA option may be chosen if “the reduction in costs makes Chapter 11 a possibility,” Ferris said. But some companies, even after a restructuring, won’t be able to make the business work.

“Chapter 11 helps fix the balance sheet issues,” he said. “But it doesn’t necessarily fix the revenue side. So it has to be a business you can salvage for Chapter 11 to make sense.”

Ferris said he was unaware of any companies thus far that have pursued the SBRA route to a revised Chapter 11. It’s only been in effect since February and the higher limits were added only in the passage of the CARES Act in late March.

A lot of companies may be waiting until the dust settles before they take any action. “It may seem counterintuitive but as this economy begins to reopen you may see an increase in the number of filings, because people can then begin projecting accurately whether there is a business to restructure,” Ferris said.

Source: https://www.freightwaves.com/news/chapter-7-death-knell-for-smaller-companies-now-has-shortcut-to-chapter-11-survival

Automotive

Tesla Model 3 Hertz order could increase to 150,000 vehicles, no FSD included

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Hertz could extend its Tesla order to 150,000 vehicles if the venture with Uber proves successful, according to the rideshare platform’s CEO Dara Khosrowshahi.

Khosrowshahi said Uber was confident that 50,000 Tesla vehicles would be a popular choice for drivers and consumers once they enter the rideshare platform.

“I’ve always said that climate change is a team sport, and our drivers want to help. So we do think that based on the demand that we’ve seen for electric vehicles on our network and Tesla, obviously, is a great brand, is a great product. I think if we make Teslas available, there’ll be plenty of takers,” the Uber CEO stated during an interview on First Move with Julia Chatterley.

Hertz interim CEO Mark Fields added that if the program with Uber proved successful, the rental car company could provide even more Teslas to the rideshare network.

“Over the next 3 years, this could grow to 150,000 Teslas that can be provided by Hertz to Uber,” said Hertz Interim CEO.

Mark Fields also stated that Hertz’s 100,000 Model 3 order did not include Tesla’s Full Self-Driving suite. Although he didn’t completely rule out the FSD use in the future. Uber drivers will have to be content with just basic Tesla Autopilot for now.

Earlier this week, Tesla inked a deal with Hertz Global Holdings Inc. for a 100,000 Model 3 vehicle order. The agreement stands as the single-largest purchase for electric vehicles to date, representing about $4.2 billion in revenue. Elon Musk revealed that Hertz paid full price for its order.

Following the news of Hertz’s 100,000 Model 3 order, the car rental company announced that it would be partnering with Uber Technologies Inc. Hertz would add up to 50,000 Tesla vehicles to the Uber Network by 2023, based on the partnership.

The Teslarati team would appreciate hearing from you. If you have any tips, reach out to me at [email protected] or via Twitter @Writer_01001101.

Tesla Model 3 Hertz order could increase to 150,000 vehicles, no FSD included


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Source: https://www.teslarati.com/tesla-model-3-hertz-150000-vehicle-order/

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5 BEST VAN RENTAL DUBAI OPTIONS FOR ALL-PURPOSE

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INTRODUCTION

Are you planning a trip with your family or groups and want to discover all the marvels and move restfully then hire a car online.. An SUV provides you with all the necessities and choices of drive and comfortability. We bid upper class 7, 12, and 14 seater vans with skilled drivers at reasonable rates. These vans have abundant well-nigh for fares as well as for profitable tenacities too. You can transmit any item from one place to another simply by making these vehicles your prime.

PROFESSIONAL DRIVERS

All drivers are skilled and expert so they keep the client’s ease and happiness so you can enjoy your journey, with us you are innocuous.

CLEAN CARS

Permitting to Dubai roads and transport rules we clean our cars on a daily basis. so we can provide you with hygienic and comfortable rides.

AFFORDABLE AND LUXURIES

We give you all types of vans affordable as well as luxuries to enjoy your tour.

REASONABLE PRICE

We offer you more affordable prices. We provide luxury vans at the most affordable prices.

Here are five of the best vans;

1.          KIA CARNIVAL

Kia Carnival is one of the company’s largest offered vehicles with the capacity of at least 7-8 passengers with 3 rows. This van has remarkable features like power steering, alloy wheels, front fog lights, automatic sliding windows, a dual sunroof, and a wireless charger. Some safety features like airbags and electric brakes. If you are in search of the best and unbeatable vans especially on low rates then look no further than a KIA. The Kia Carnival has 1 Diesel Engine. The diesel engine is 2199 cc. The Carnival is a 7 seater with 4 cylinders and has a length of 5115mm, a width of 1985mm, and a wheelbase of 3060mm.

2.          TOYOTA PREVIA

Toyota Previa is one of the most popular rent a van in Dubai. These vans are comfortable and appropriate for the families that are peripatetic together due to their large size, which gives them generous seating and storage space for people as well as their well-found interiors. Previa is an 8 seater with 4 cylinders and has a length of 4.795, a width of 1.800, and height of 1.750, and a wheelbase of 2.950. With safety features like an anti-lock brake system, immobilizer, airbags, and anti-theft alarm. Some comfortable features like automatic AC, AUX, USB, RADIO, MP3, Keyless entry, and temperature display.

3.          TOYOTA HIACE

Toyota Hiace is one of the marvelous commercial vans. This is one of the most trustworthy commercial vans in commerce. If you are looking to rent a consistently viable van for any or all purposes, then there is nothing more resilient, or concrete than the Toyota Hiace. Hiace is a 14 seater with 3 doors and has a length of 4840mm, a weight of 1895kg, a height of 2105mm, and a wheelbase of 2570mm. some convenience features like AC, Heater, power steering, power windows, folding seats, cup holders, and armrest. And Safety features like Airbags, an anti-lock braking system, seatbelts, and child lock.

4.          HYUNDAI H1

Hyundai h1 is one of the largest passenger MUV, having 3 rows and 12 seats. The H1 has an altered spec of holding 12 fares at a time and also a lot of freight for viable devotions in a perfect way. If you are looking to hire a van to carry cargo as well as a large family comfortably then book a Hyundai H1. H1 is a 12 seater with 5 doors and it has a length of 5125mm, a height of 1925mm, and a wheelbase of 3200mm. and has comfort and convenience features like AC, power window, power steering, heater, and adjustable seats. And security and safety features like airbags, child safety locks, an anti-lock braking system, and rear seat belts, parking sensors, Central Locking, power door locks, anti-theft device, and immobilizer. Entertainment features like FM RADIO, USB, Bluetooth, speakers, CD, and DVD players.

5.          NISSAN URVAN

The Nissan Urvan has 1 Diesel Engine. The diesel engine is 2953cc. Available with Manual transmission. Urvan is a 13 seater with 4 cylinders. With airbags, anti-braking system, auto door closer, power window and central locking system, front fog lamp, high sunroof, Power Steering Wheel, foot Rest, Cup Holder, AUX, and speakers. Urvan has a length of 5230mm, a height of 2285mm, and a wheelbase of 2555mm.

Urvan controls the temperature through the front and rear heater and air-conditioning that helps retain travelers’ cozyness. And a remote keyless entry makes unlocking and locking your Nissan Urvan unproblematic – specifically supportive for when your hands are filled. The panic alarm is also a good feature in Nissan Urvan so go and rent a van in Dubai as soon as possible.

Source: Plato Data Intelligence

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Slo-Mo Footage Of Running Engine With Clear Cylinder Is Mesmerizing

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Internal combustion as you’ve never seen it before.
PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
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Source: https://www.motor1.com/news/542602/running-engine-clear-cylinder/

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Automotive

Slo-Mo Footage Of Running Engine With Clear Cylinder Is Mesmerizing

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Internal combustion as you’ve never seen it before.
PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.motor1.com/news/542602/running-engine-clear-cylinder/

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