Sader Law Firm Blog - Kansas City Bankruptcy Attorney Blog

Small Business Bankruptcies Spiked Before the Debt Limit Ended

Posted on July 10, 2024 by Sader Law Firm

Bankruptcies under Subchapter V of Chapter 11 soared to a record high of filings in a single day as the debt limit of $7 million was reverted back to $3 million, with 91 filings on June 20, exceeding the typical volume of eight to 10 filings in a typical business day. Originally intended to last only one year, the higher limit was extended twice, with filings surging both times as the deadline approached. The law introducing Subchapter V went into effect in 2020, with the goal of making Chapter 11 bankruptcies faster and less expensive for small businesses by eliminating the need for disclosure statements and creditors’ committees. The Subchapter also removes the absolute priority rule that mandates priority claims to be fully repaid before the lower-ranking claims receive recoveries. In a report from Law360, Jonathan Grasso of YVS Law LLC represented Julian’s Recipe, a packaged, frozen baked goods company…
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How Rising Hospital Prices are Impacting Inflation

Posted on June 25, 2024 by Sader Law Firm

As most Americans experience the impacts of inflation on their daily lives by means of increased grocery and gas prices, many might not realize the impact of medical care at hospitals on inflation rates in the United States. Hospitals were not as quick to increase prices during the pandemic compared to supermarkets, retailers and restaurants. However, costs are beginning to significantly increase, with patient costs jumping nearly 8% in April 2024 compared to the same month in 2023, according to the Department of Labor, marking the highest increase in any month in almost 14 years. Several hospital procedures are seeing price increases of as much as $700, which translates to a 4.5% increase. These price escalations are impacting patients and employers as well, with higher health insurance premiums and limited wage hikes. For the first waves of inflation in the economy, hospitals held prices steady due to contractual obligations with…
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Small Business Bankruptcy Filings Rise Due to Struggle with Higher Costs

Posted on May 20, 2024 by Sader Law Firm

With the rising costs of running a business, from raw materials to loans and insurance, has also come the rise in small businesses filing for bankruptcy. Business owners are struggling to reconcile the impacts of inflation while preparing for the potential end of bankruptcy provisions brought on by the COVID-19 pandemic. Subchapter V bankruptcy filings increased by 60% in a year, from 146 filings in April 2023 to 233 in April 2024, according to a report from Law360. Most types of bankruptcy filings are rising, with Chapter 11 filings increasing by 40% year over year and total bankruptcy filings rising by 28%. As inflation and increasing interest rates continue to weigh heavily on consumers and business owners, many are having difficulty meeting their debt obligations and are seeking out options that can ease their financial burdens. “These increases reflect the increased cost and expense pressures both individuals and businesses are…
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