South Florida (and everywhere) facing avalanche of bankruptcies
Some businesses closed forever from COVID-19 crisis, others barely hanging on
HALLANDALE BEACH, Fla. – Bankruptcy attorneys are saying they are hearing from all types of business owners and as far as new bankruptcy filings go, it’s just the tip of the iceberg.
James Silver is one of the busiest men in South Florida; he’s a bankruptcy attorney with the firm Kelley Kronenberg in Miami.
"I’d say within the last several days the phone has been ringing off the hook. At this point, it’s not about filing bankruptcies, it’s just taking calls about plan bankruptcies or creditors looking for representation of what to do. You're still not seeing the full avalanche yet."
On the door of Metro Diner in Pembroke Pines, there is a sign saying they are closed for good because of COVID-19.
TooJays's Deli, CMX VIP Cinema Experience filed for bankruptcy protection already.
More than one million people work in the restaurant and food service industry in Florida. It's 12 percent of the employment in the state. More than 350,000 people work in retail, yet parking lots all over South Florida remain empty.
Silver said he has professionals even in the dental field shutting down their businesses because they were only allowed to see emergency patients during the shutdown and couldn’t afford to keep their offices afloat.
Joseph Luzinski, Senior Managing Director with DSI Consulting, has spent three decades helping restructure troubled companies.
"We are getting calls from people who are about ready to hit the wall but don’t know what to do."
He calls what’s going on “uncharted territory.”
Luzinski said: “What we have at the moment is just a crush of everybody being in the same situation at the same time. People are tapping into personal finance, tapping into retirement funds.”
Both men said every person's situation is different.
"There are situations where if we can work it out without a bankruptcy, that’s much more cost-effective," Luzinski said.
Congress passed the Small Business Reorganization Act. It’s a streamline bankruptcy making it more likely for businesses to stay in business and reorganize and much easier than Chapter 11.
"Everyone is scared," Silver said. "You’ve got people that owe the money and the people who are owed the money who in turn owe other people money."
Lizinski said he's working with business owners that are "doing a lot of planning. But not much implementation at the moment because the world is on hold."
As far as Toojay’s Deli goes, it remains open; it is just restructuring their 16 restaurants. That’s not the case with Metro Diner who has shuttered its three locations in South Florida permanently.
The bankruptcy courts in South Florida are officially closed and will not reopen anytime soon, but they are taking new filings electronically.
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