Foley Analysis on Stimulus Package’s Help for Distressed Companies Cited in Bloomberg

31 March 2020 Bloomberg News

Analysis on the federal stimulus package from Foley’s Coronavirus Resource Center was cited in the Bloomberg article, “Deeply Distressed Companies Risk Being Shut Out from Fed’s Loans.”

The article notes that troubled companies looking for help on their bills or already in bankruptcy may find little help getting federal funds from the stimulus package as current law bars the government from making loans to companies that have either filed for Chapter 11 bankruptcy or fail an insolvency test.

But for companies pushed into bankruptcy by the coronavirus, the law does loosen some restrictions, Bloomberg noted, citing an analysis by the law firm Foley & Lardner. The debt limit on small businesses seeking to use rules that make it easier for them to reorganize has been increased from $2.7 million to $7.5 million.

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