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Laura Davis Jones Quoted in Law360 Article About the Recent Rise in Chapter 11 Bankruptcies
Laura Davis Jones was recently quoted in Vince Sullivan’s Law360 article, “Rise in Ch. 11 Cases Echoes 2008 Financial Crisis.” The article discusses the recent increase in chapter 11 bankruptcies, referencing an Epic Global report detailing the cases filed this year and how they compare to previous years.
Laura’s quotes included similarities between the COVID-19 crisis and the 2008 financial crisis. Excerpts from the article can be found below.
"Laura Davis Jones, a name partner with Pachulski Stang Ziehl & Jones LLP, said both the 2008 crisis and the current COVID-19 crisis are similar in that they both arose unexpectedly, but the situation the economy is facing now is different because revenues have evaporated almost overnight for many industries.
The coronavirus's impact is also being felt on a much wider scale geographically than the financial crisis of 2008 and 2009, Jones said, reaching every continent and virtually every industry that depends on public operations.
'This is very international in scope,' Jones told Law360. 'There is not a country that is not affected by this.'
Laura went on to discuss the 2008 financial crisis further.
"Jones elaborated that 2008 saw lenders impacted first, which then spread into the housing sector and trickled down to the building trades and related industries as demand for homes dropped."
Laura also commented on government aid, mentioning the differences between the aid in 2008 and 2020.
"Jones said the government aid currently available has provided a parachute for individuals that was not available back in 2008, so the number of personal bankruptcies might not reach the same levels as they did back then.
But the aid available to corporations this time around was not provided quickly enough or in the right manner to stave off insolvency for the hundreds of companies that have filed for Chapter 11 in recent months, she said.
Personal filings may be mitigated by the number of employers that are able to bring workers back on board as business restrictions are eased, Jones said, and the stimulus payments and extra uninsurance compensation available to many laid-off workers could be enough to bridge the gap until that happens.
'In 2008-2009, there was no parachute, so people had no choice but to hold on as long as they could and then file,' she said.
September will be a major turning point for many corporations and individuals, Jones explained, as the reopening status in many areas will dictate whether normal or close to normal business operations can resume."
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