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COVID-19, Courts and Recovery Through Alternatives to Bankruptcy

On April 29, 2020 by Schnader

Jonathan W. Hugg published a commentary in The Legal Intelligencer, “COVID-19, Courts and Recovery Through Alternatives to Bankruptcy.” Hugg is co-chair of Schnader’s Financial Services Litigation Group.

He wrote in part:

The legal aftermath of the epidemic is a threat to our recovery. “Business as usual” will likely prove impossible, considering the volume of litigation and the limited budgetary resources expected for courts during the recovery period. Meanwhile, unprecedented mass business shutdowns have detonated a chain reaction of unparalleled mass breaches of contract and lease defaults throughout the economy, dwarfing those of the Great Recession.

. . . . .

There must be a better way to handle the needs of financially stressed businesses during the upcoming recovery. Commerce-oriented court programs could help avoid this quagmire. By facilitating the speedy and fair settlement of commercial claims arising from the epidemic, courts could help businesses preserve value, avoid bankruptcy, save jobs and foster a return to near normalcy. The key is for courts to impose new case management procedures that allow for early and aggressive mediation of coronavirus-related contract and lease claims and similar disputes. The time to begin discussion about the efficacy and scope of this approach is now, before courts return fully to operational status and must address not only the backlog of pre-pandemic cases, but also the inevitable flood of new claims caused by COVID-19.

Click here to read the full Commentary. Or read it here.

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