The Palm sues the Nashville Hilton over losses related to COVID

Late Thursday, the Palm Restaurant sued the Nashville Hilton, arguing it should not have to pay full rent during the pandemic and especially not for time periods when the Hilton hotel itself wasn’t open.

It’s an interesting argument, about issues that will be litigated throughout the country over the next few years.

Generally, in Nashville (and everywhere else), closures related to COVID-19 haven’t given tenants much factual or legal basis for avoid rent payments. That’s because most commercial leases–more than anything–make payment of rent such a supreme duty under the lease that anything short of total physical destruction of the premises doesn’t excuse payment.

The Palm’s Lease at the Hilton is no different.

The Complaint alleges that “[t]he Lease provides for a rent abatement in the event that the Premises is damaged as a result of casualty,” citing Section 23.1 of the Lease. Specifically, that provision requires that the Property “be damaged by fire or other casualty” and has the typical murky text that you’d expect in a landlord-drafted lease that assumes the premises were physically damaged.

(Side note: The Lease also has a “Force Majeure” provision that is so iron-clad that The Palm doesn’t even cite it in the Complaint.)

As in so many of these cases, the million dollar question is: Does the COVID-19 virus cause “physical damage”?

The Palm takes a novel approach, in part, arguing that the Hilton’s voluntary shut-down caused the losses at the restaurant, since The Palms’ decision to initially lease the space was so heavily dependent on the existence of a thriving Hilton hotel.

“Pursuant to the Lease, the Hilton was and is required to operate a first-class business hotel…[and] provide the Palm with access to Common Areas…” As part of the Lease, the Palm’s dependence on the Hilton is evidenced by the facts that: Palm allowed Hilton guests to charge meals to their rooms; the Hilton heavily advertised the Palm in the hotel and in the rooms; and the Palm agreed to identify the Hilton in its own marketing.

Then, COVID hit. On March 12, the SEC tournament was shut down. On March 20, Metro shut down in-person dining. On March 22, the State of Tennessee took similar action. In response, on March 22, the Palm closed to in-house dining.

But, the lawsuit alleges, “[a]t no point in time since March 1, 2020 has the Hilton been forced to cease operations due to a state or local governmental order. … Despite the fact that it was under no obligation to do so, the Hilton shut down on March 24, 2020. …Upon information and belief, despite its management company having cash on hand necessary to support ongoing operations, the Hilton remained closed during April, May, and part of June.”

The Palm re-opened to 50% capacity on May 11 (as allowed by local and state law), but the Hilton didn’t re-open until June 8, 2020. The Palm argues that it was denied the benefit of foot traffic from the Hilton, marketing and promotional benefits, and access to Common Areas.

When the lawsuit was filed, the Palm had not paid rent for April, May, June, or July 2020 (including CAM charges for space at the Hilton). The Hilton has refused to discount any of that rent, despite the Palm’s requests for a discount.

This lawsuit asks the Davidson Chancery County Chancery Court to provide “declaratory relief” and declare that The Palm is not in default and is not required to pay April, May, June, and July 2020 rent (as well as get back some of the rent paid in March).

This case raises nearly all of the issues the commercial landlord-tenant bar will be fighting in the near future. Plus, this one has the added awkwardness of two inter-dependent, adjacent businesses being involved in direct litigation.

This may be the first notable COVID-related landlord tenant lawsuit filed in Nashville, and it’ll be one to watch over the next few weeks, months, and, gulp, year.

TL;DR: The lawsuit asks whether the Hilton’s decision to shut its own operations down creates a factual or legal defense to some or all of the amounts due from The Palm under the Lease.

Second Lady A sues Original Lady A in Nashville: Interesting Legal Issues for Interesting Times.

I’ll start by saying this: Lady Antebellum’s heart seemed to be in the right place.

As you will recall, last month, the band announced that it was changing its name to “Lady A,” which was in recognition of the racially insensitive history of the term “Antebellum.”

The news was applauded, in light of the global outpouring of support for the Black Lives Matter movement and the growing awareness of how little so many of us understand about what it means to be a non-white member of American culture. It’s not cool for a white country music band to be walking around with Antebellum in their name.

But, then, you know what happened next. Anita White, an African American gospel and blues singer in Seattle–and who has long performed as “Lady A”–objected to the name-change.

Side-note: Did nobody do a google search on any of this?

Per Second Lady A’s twitter, the parties had a number of conversations–all friendly (see above)–which became more complicated, as Original Lady A began to recognize that her interests may not be entirely at heart in the band’s move.

Then, well, I’ll let Second Lady A say it: “Today we are sad to share that our sincere hope to join together with Anita White in unity and common purpose has ended.”

To be clear, that date of the end was July 8, 2020, when Second Lady A filed a lawsuit in Nashville federal court, asking the District Court to grant them the right to use the trademark. The lawsuit says that it isn’t asking for money, but, still, it’s a fairly aggressive move. Apparently, Original Lady A asked for $10 million as part of the conversations.

This isn’t Trademark Rights 101 , but I follow really smart lawyers on twitter. Such as this twitter chain by Alexandra Roberts, an Intellectual Property law professor, who analyzes this situation top to bottom.

It’s a really fascinating view into the thought process that a court will consider, both on the facts and relevant law. Read the whole thing…you’ll be smarter by the end of it.

Another issue that I thought was interesting is this: Did Original Lady A submit herself to jurisdiction in Nashville by participating in phone and Zoom video calls, when Second Lady A were physically in Tennessee? Yikes, if that’s the law. Professor Roberts suggests that may be the alleged basis.

So, two quick-takeaways.

(1) This is a terrible look for Second Lady A. Maybe they’re correct as a matter of law, and I’ve just got more to learn about IP law. But, again, what a terrible look for Second Lady A. I tell my clients this all the time: You may be right here, but are there other factors to consider. Should we keep looking for a middle-ground resolution?

(2) I can’t wait for more information on the basis for jurisdiction in Nashville, Tennessee for this lawsuit.

Nashville Post: The Bankruptcies are Coming, but Where are the Bankruptcy Attorneys?

If a creditor rights attorney appears in a movie or TV show, he is generally the bad guy who galvanizes the stars of the movie to assemble a dance competition to save the community center from foreclosure.

In fact, for a long time, my LinkedIn bio described my creditor’s rights bankruptcy practice as:

This is an area of law they don’t make movies about. In fact, the only movie about creditor bankruptcy attorneys that I know of is Heart and Souls, a 1993 movie starring Robert Downey, Jr. In that movie, his childhood guardian angels come back to Earth to re-visit him as an adult and are horrified by what he does for a living. Well, that’s my job.

As a result, insolvency attorneys tend to be slightly self-conscious about our role in the legal ecosystem. When our law firms’ clients host open houses at their glitzy new facilities or shiny, over-budget restaurants, it’s the bankruptcy attorneys standing by the bar who eyeball it all and wonder how much all it cost and whether they can pay for it.

(Note: I’m actually kidding about this…the bankruptcy attorneys actually never get invited to grand openings or fun events. Kidding.)

So, in light of all that, you can imagine how proud I was that the Nashville Post ran a magazine article this week showcasing the starring role to be played by bankruptcy attorneys in the coming months and years.

Step aside, corporate mergers and acquisitions counsel, this is a job for a Bankruptcy Lawyer.

It’s a well-done article, with spot-on analysis of the issues facing our local economy. This quote from local debtor counsel Nancy King really nails the current mindset:

Most companies right now are either in the stunned phase, or they’re in the ‘I want to work it out with my bank’ phase, or possibly the ‘I’ve gotten a PPP loan, I think I might make it’ phase. … When all that comes to an end, I think Chapter 11 is going to end up being an option for a lot of those companies.

One of the most interesting aspects of the article is the narrative that there aren’t enough bankruptcy lawyers in Nashville.

It’s absolutely true.

Nashville is widely known as having a sophisticated bankruptcy bar, due to the wide range of complex cases that get filed in our district (both consumer and commercial), our really smart judges, and a deep roster of sophisticated bankruptcy lawyers.

Nevertheless, when the Middle Tennessee economy rebounded so quickly from the Great Recession, local law firms simply didn’t restaff their bankruptcy practice groups. Instead, from 2013 to 2019, the smart young lawyers went into real estate, development, and corporate work.

As a result, most Nashville law firms have bankruptcy practices that are, basically, composed of the same bankruptcy lawyers who steered the ship in the last recession. Sort of like the 2012-13 Boston Celtics–a good team, but lots of veterans and hardly any young prospects.

We’ve known this is coming for a long time. In fact, at the 2019 Bankruptcy Lawyer Holiday Party (yes, it’s a real thing), the three most popular party guests were the three new faces (all under the age of 30). They were subjected to an endless barrage of business cards, lunch invites, and recruiting pitches that night.

In fact, one of those young lawyers has already been poached away by an out-of-state law firm that has one of the largest bankruptcy practice groups in the country.

So, my advice to young law school graduates (or students)?

Learn Bankruptcy. Read the Bankruptcy Code. It’s literally an inch thick. There’s always another recession around the corner.

You’ll have a great (and long) career.

Also, while you’re quarantined at home, watch Heart and Souls. It really is a fun, under-appreciated movie.

New Chancery lawsuit spotlights struggles for Airbnb companies in Nashville

As you’d expect, COVID-19 and the related travel restrictions have had a catastrophic impact on the travel and hospitality industry. In Nashville, rental income for once wildly-lucrative Airbnb properties evaporated in an instant.

Consider Stay Alfred, a hospitality start-up based in Spokane, Washington that had 2,500 units in 33 cities, which closed its doors in April and is now subject to a receivership action.

In Nashville (and in Memphis), Stay Alfred had a number of buildings where it controlled nearly all the units, such as the shiny 505 Tower in downtown Nashville, as well as other prime locations in both cities. By April, Stay Alfred had left those buildings entirely.

Now, it appears that Sonder USA, Inc. may be headed toward a similar fate. Sonder manages over 12,000 rental units in 28 cities, generally for short and medium term rentals. In its most recent efforts to obtain private equity, Sonder provided a valuation of $1.3 billion.

Yesterday, in Davidson County Chancery Court, a Georgia developer filed a breach of contract lawsuit against Sonder over its failure to take possession of 101 units in a residential building in Nashville’s Hillsboro Village, located at 1620 21st Avenue South.

In this deal, the Plaintiff-developer agreed to purchase the 101 units in December 2019, many of which were already rented out to long term tenants. As those existing tenants either left or were forced out, the developer would then lease those units to Sonder, which Sonder would then manage as short term rentals. Under the Lease, Sonder would pay the developer annual rent of “$2,641,387.32.”

What could go wrong in Nashville real estate in 2020, right?

Per the Complaint, in April 2020, when Sonder was scheduled to take possession of the first batch of units, Sonder immediately went into default. Sonder claimed defenses of force majeure and impossibility of performance and frustration of purpose.

When Sonder failed to take possession or pay, Plaintiff filed this action, seeking $2 million in current and future rents. This is going to be an interesting case, since the parties seemed to go into this venture, jointly, in December. If so, then why does all of the risk shift to the lessor-defendant? Does the nature of the business relationship mean that Plaintiff and Defendant both should bear the risks?

I live in Hillsboro Village, so this one is a bit personal for me. This is my neighborhood, which is a bustling area of families, Vanderbilt workers (school and hospital), and college kids. It’s a residential community, not a vacation or party destination.

Housing is scarce. And getting more and more expensive.

As somebody who has lived in this neighborhood for over ten years, it’s irritating that these out-of-town companies created a business model to convert limited, scarce housing assets into STR properties by forcing residents out of their leases and out of the building.

Think about if you’re a grad student or doctor at Vandy, and you love your apartment. It’s right there next to your school/work, next to Luke Bryan’s steakhouse (which really is delightful), and next to Dragon Park. Sounds great, right? But, when you get to month 10-11 of your lease, you get a notice from the new owner that they want you out; the entire building is converting to vacation rentals.

I’m sure the developer would say that the “market dictates the highest and best use of property.” Let’s hope our new economy sends its own message to these opportunistic developers who want to convert our residential space into a hotel / vacation rentals. One that our local government is clearly afraid to send.

Maybe an empty building where all the long term tenants were forced out will send that message.

For what it’s worth, that message may have been received. As of the time of this posting, a great number of the units in Village 21 are now available for long term leases.

Davidson County Chancery Court’s Zoom Trial Worked!

Last month, I told you Davidson County Chancellor Ellen Lyle had scheduled a business litigation trial to be conducted entirely via Zoom.

This was big news for laywers. After COVID-19 prevented most in-person court proceedings, many innovative courts began to conduct contested, non-evidentiary hearings via the phone or Zoom.

What was so interesting about this matter, however, was this was a full-blown trial, with witnesses and 61 exhibits. This required lots of advance planning, exchanging exhibits, and technical preparation (Does Zoom work? Can you share screens and jointly review exhibits?)

And, it worked. A link to the live-streams remains available at Part III’s YouTube channel. (What a crazy thing to type…”Part III’s YouTube channel.”)

It’s been an unprecedented time for our world, but it’s awesome to see our Tennessee Courts evolving to make sure matters get heard and also not being afraid to open up these news-worthy proceedings to the public.

Earlier this week, the Tennessee Supreme Court conducted a full day of hearings via Zoom, with the proceedings live-cast on the Court’s YouTube channel.

My office is just down the street from the Davidson County Courthouse and only a block or two from the Tennessee Supreme Court, so it’s no big deal for me to stop by and observe an interesting or newsworthy court proceeding.

But, for the average citizen, the barriers to seeing the justice system at work are staggeringly prohibitive. The average person probably doesn’t know where the courthouse is, how to get there, where to park, or whether they are even allowed to “pop in” and watch a proceeding.

Long story short, the Tennessee Courts have really done a great job during the pandemic; not only staying open, but expanding and innovating. Here’s hoping that the progress continues.

Davidson County Chancery Court has scheduled an actual trial that will be conducted via Zoom.

Mark your calendars: On April 28, 2020, Chancellor Lyle of the Davidson County Chancery Courts has scheduled a trial to be conducted via Zoom! (Full text: Lyle Order re Zoom trial).

For the past 5 weeks, Tennessee courts have been closed for most in-person proceedings, but, during that time, many courts have conducted telephonic or video “non-evidentiary” hearings. This is the first instance that I’m aware of that a civil court is conducting a real bench trial with witnesses and exhibits.

The underlying facts are interesting, from a creditor’s rights perspective.

The lawsuit seeks a declaration of the validity of a mechanic’s lien asserted on a Gulfstream GV  (a/k/a a “G5”) private jet, via both a recorded lien in the Davidson County Register of Deeds and with the Federal Aviation Administration Registry.  Per the Complaint, the plaintiff bought the jet from an actual Sheikh.

gulfstream g5(Note for the non-Sheikhs out there: Retail value for new G5s can be between $36MM and $48MM).

The Defendant / lien-claimant is a marketing firm in Kentucky that claimed a mechanic’s lien on the jet for sales marketing services provided to the Sheikh.

(I’ll reserve my thoughts on the validity of a mechanic’s lien when no actual physical improvements are provided, but I will note that, generally, the lien claimant has to show actual improvements to the property. Cases on aircraft liens have held that “gas for refueling” doesn’t even qualify, since gas doesn’t provide an actual improvement to the aircraft.)

This one will be really interesting, both substantively and procedurally.

 

 

Broadway Bar files first COVID-19 Insurance Coverage Lawsuit

What insurance companies do over the coming weeks in response to the COVID-19 pandemic is going to matter a lot to restaurants all across the country. Will insurance companies pay the claims, or will insurers use this this historically unprecedented situation as a way to poke holes in their customers’ coverage? (I’m betting on the latter.)

This question is of supreme importance to downtown Nashville, where the downtown honky tonks and restaurants stay jam packed 7 nights a week.

Except for, of course, the past 4 weeks.

undergroundToday, one of the downtown bars filed a lawsuit (full copy here: COVID Insurance lawsuit) against Nationwide Property and Casualty Insurance Company, challenging the denial of a coronavirus-related claim. The plaintiff is Nashville Undergound, described as “a seven-story restaurant, bar, nightclub and live music venue” and exactly the type of place that has never, ever practiced social distancing.

The lawsuit alleges that Nationwide denied the claim by citing policy “exclusions” for losses related to bacteria or virus and by arguing that there was no physical damage or physical loss to the restaurant. These are exactly the arguments that I told you they’d be making.

This will be interesting to watch, and, of course, this lawsuit will be the first of many just like it. (Another free prediction? This will nearly instantly be removed to federal court.)

For more background, this article, titled Opposite Sides of the Table: Restaurants Seek Recovery From Insurers for Business Interruption in the Wake of COVID-19,  has a really good and comprehensive recap of the insurance issues facing restaurants.

“According to restaurant.org, since March 1, the industry has lost more than 3 million jobs and $25 billion in sales, and roughly 50% of restaurant operators anticipate additional layoffs in April.  The National Restaurant Association has predicted that the industry will suffer $225 billion in losses in the next few months, forcing the elimination of as many as 7 million industry jobs.”

 

COVID forces old-school lawyers to embrace new technology

Tennessee Courts get yanked into the 21st Century. This week, I’ve had two telephonic court hearings.  They’ve both been a little strange.

On one, I called the Clerk’s office, who then gave me the Judge’s cell phone number. When I called the Judge on her cell phone, she was pretty clearly on a walk outside.

On the other, the court set up a call-in line for the docket call, with about 25 attorneys waiting for their specific matter to be called. When my matter was called, about 6 attorneys all spoke at once.

When my matter was over, I stayed on the line and listened to the next argument (on mute) to see how it flows and to plan for when I have to conduct my own complicated hearing. I learned that there is definitely an art to effective presentation via a phone call.  Also, it was weird, just silently lurking. A Bloomberg news reporter listened in on a similar court hearing, and she described it as “uncomfortable and oddly voyeuristic.”

I think all this can be figured out, but there’s definitely going to be learning curve.  The Tennessee Supreme Court conducted oral arguments via video this past week, and those went well.

Although, if I were one of the lawyers arguing, I would have 100% had to stand up for my presentation.

tn sup cort

Personally, I’m not looking forward to more telephone or video hearings. I go to court a lot, and there’s so much you pick up by physically present in the courtroom, whether it’s a good read on the judge’s demeanor that day, on opposing counsel, or just the ability to be physically present when you’re making a huge argument for a client.

There is simply so much that goes into oral argument, and there’s so little of that in a phone call.

Zoom. Maybe we don’t need to see each other.  Speaking of how technology maybe doesn’t always make things better, when all this first hit, everybody wanted to do a Zoom call. But, then, after a week of seeing the decorations in everybody’s guest bedroom, we sort of figured out that all this could have been done via conference call.

Personally, I can’t decide where I look: at who is speaking; at myself (which I’m usually doing); or directly at the camera. Bonus points to the participants who just leave their camera off the whole time.

Either way, I guess I fall in the middle on this app. In some situations, it makes sense to be able to see the person and get a read of their social cues or to establish a rapport. For example, I represent a large class of clients on a matter, and I like to communicate with them via video so they can see me and my team.

Slack.  I acknowledge that I sound like a curmudgeon.  So, to counteract that, I’ll provide a whole-hearted endorsement of Slack, the real time messaging platform.  It seems like a really effective and well-done way to manage work teams.

Side-note: If you’re navigating all of this, I can’t recommend the Lawyerist website enough, as well as the Lawyerist podcast.  It’s run by a group of very smart lawyers, and they constantly talk about remote work, law firm management, and law tech and innovations.

I really enjoy all that they do on that site to educate lawyers.

New Developments versus Custom and Habit. It’s hard to tell how much of this is temporary or here to stay. Some part of that answer will depend on the Court leadership forcing all counties to fully embrace the new rules, policies, and technology.

Yesterday, we were figuring out how to get a garnishment form notarized with all of us spread out over town.  One of the lawyers on the e-mail chain correctly pointed out that Tenn. R. Civ. P. 72 and the brand new Supreme Court Orders allow for /e/-signatures and declarations in place of a notarized signature.

This was a garnishment, though, in a very small county, one that probably hasn’t read the Order from last week, and where the front desk clerk would take one look at the form, see the lack of a notarized signature, and potentially reject the filing.

This is what makes collections so different than other aspects of the law. Once you get the judgment, instead of dealing mainly with a judge, you’re mostly dealing with court clerk staff. You can be technically and legally correct, but, if you don’t follow their habit and custom?

Long story short, we got it notarized. Our goal wasn’t to be right. It was to get our garnishment issued.

My hope for all of this is that the Administrative Office of the Courts establishes a commission to look at all these issues and to anticipate as many of these issues that could arise in the future. And I hope that they don’t just pick the usual same people from the usual same big law firms to participate. Those lawyers don’t talk to clerks. They don’t file e-file documents. They don’t go to court on all kinds of matters.

The decisions that are being made today may set the policies and procedures across the state for years, and it’ll be interesting to see what changes implemented during this pandemic become the new custom and practice.

The CARES Act’s Exclusion of Debtor-in-Possession may be a death sentence to pending bankruptcy cases.

The Coronavirus Aid, Relief and Economic Security Act of 2020 is a great legislative response in helping thousands of struggling businesses navigate the financial disaster presented by the coronavirus pandemic.  The response to COVID-19’s spread has shut down thriving businesses, put people out of work, and is having ripples throughout the economy.

Despite the intent to provide wide and sweeping economic relief to affected businesses, Congress made an ill-advised exclusion when determining what businesses can be an eligible participant in the CARES Act loan program:

“(V) the recipient is not a debtor in a bankruptcy proceeding…” 

As the plain language indicates, any business that is a debtor-in-possession in an active Chapter 11 bankruptcy reorganization is ineligible for relief under the CARES Act.

This is a terrible oversight.

When a business files for relief under chapter 11 of the Bankruptcy Code, it then operates as a “debtor-in-possession,” continuing its pre-bankruptcy operations under the oversight and subject to the approval of the Bankruptcy Court.

The goal for the debtor-in-possession is to address, correct, and overcome whatever financial or operational issues that caused the bankruptcy and then reorganize its operations, finances, or governance structure in a way that a more successful business will result.

So, in short, a business operated by a debtor-in-possession operates like any other business. It has employees. It pays rent. It pays taxes. It buys goods and inventory.

If the DIP struggles and can’t pay employees, rent, taxes, and other operational costs, it fails.  Just like any other business.

And, just like any other business, a global pandemic has a catastrophic impact on its operations.

The exclusion of CARES Act financial relief to a debtor-in-possession in a chapter 11 reorganization is, in essence, a death sentence to that debtor’s ability to reorganize. It lays off employees. It can’t pay rent. It can’t pay taxes. It can’t confirm a plan of reorganization. It simply figures out a way to survive, without any help, or close.

Here, I’m guessing that Congress wanted to exclude the shutting down or liquidating bankruptcy debtor’s ability grab some cash. But, by including a broad exclusion, they’re hurting legitimate businesses that may already be on a path to survival.

With this exclusion, the Act forces the debtor to ponder a strange choice: Whether to voluntarily dismiss an otherwise viable bankruptcy proceeding in order to apply for federal relief.

 

 

Prediction: Tennessee Bankruptcy Filings will hit all time in June 2020

About two weeks ago–about 6-7 days into the COVID-19 shut down–I had a work call with a debtor’s bankruptcy attorney.

After we briefly talked business, we talked about how everything else was going. I asked him if he was swamped with anxious debtor phone calls. He said he wasn’t, which surprised me. During that first week, the news was full of businesses closing and mass layoffs.

In fact, he wasn’t even at his office. As we talked, I could hear that he was at the store, buying groceries and navigating an entirely separate conversation with the check-out clerk.

As he was loading the groceries in his car, he clarified: “It’ll be busy, like 20 hour a day work-days. But not yet. Right now, nobody knows what tomorrow looks like. Right now, people are worried about survival, not about their bills. Starting in April, maybe early May, that’s when it’ll start. It’ll be when they finally realize that Bankruptcy is their only option.”

I’ve thought about that call in all my conversations with bankers and small business owners navigating financial relief under the CARES Act (the Small Business Stimulus loans, the Paycheck Protection Program, or the expansion of the EIDLP programs), under their business interruption insurance, or calling their lenders for help.

This sense that a bankruptcy filing isn’t the first choice, but, for so many people, it’s inevitable.

Today’s Wall Street Journal has an article, Bankruptcy Lawyers Gear Up for Surge in Filings Due to Coronavirus Fallout, which previews this potential explosion in bankruptcy filings.  “The spike hasn’t caused an immediate jump in corporate bankruptcies, which require financing and—absent an emergency—usually take weeks or months to prepare.”

The reasoning, there, is that a really complex corporate bankruptcy isn’t something that you can rush into. It takes internal planning,  a massive review of financial records, and, in many cases, advance negotiation with essential creditors. In a different time, that process can take 6 months. The coronavirus hit us like a tidal wave, taking us from healthy to destroyed (financially) in a week.

But, what about the average consumer? Well, as a result of quick action by the Tennessee court administrators and Tennessee Supreme Court, most in-person court proceedings are suspended through the end of April.  As a result, even the most aggressive landlord can’t evict a tenant, because there’s no court to sign the order.  Plus, there’s a good legal reason to avoid conducting a foreclosure in Tennessee during this time.  There’s a good chance these suspensions are extended more as this situation develops.

Many debtors file Bankruptcy directly in response to a financial distress, often to stop a pending credit rights action (a foreclosure, a court date, a deadline in a lawsuit). Without these prompts, will there be an urgency for a debtor to call a bankruptcy attorney? Maybe not.

Are bankruptcy attorneys even meeting with potential clients during all this? Most of the ones I’ve talked to aren’t.

Also, as a matter of timing, what’s the benefit of filing early? Right now, many people are out of work and don’t have regular income. A filing now would draw a line in the sand of their debts at a time when their finances are most uncertain. Candidly, their debts will most likely extend far beyond that line. Why not wait and see if you’re forced to go deeper in debt before you file?

As strange as it sounds, it’s likely that bankruptcy filings will not spike until the economy starts to recover, when businesses start to reopen and people begin to go back to work. That’ll be when people can stop worrying about survival and start worrying about digging themselves out a financial hole.

So, yes, Tennessee bankruptcy lawyers are going to be busy and, if 2008 is any indication, Nashville bankruptcy lawyers may end up being some of the busiest in the country.

I think that happens in June.