During economic hardships, small businesses may need to utilize the oft option of filing for bankruptcy protection to reorganize their debt. Bankruptcy often is considered a last resort option. Yet, it provides a powerful mechanism for individuals and small businesses to reorganize and manage their debt. The Small Business Reorganization Act of 2019 (“SBRA”) added Subchapter V to chapter 11 of Bankruptcy Code to further assist qualifying businesses with debt relief. 11 U.S.C. §§ 1181-1195. The Debtor friendly provisions added to the Bankruptcy Code with Subchapter V of chapter 11, make reorganizing debt a more streamlined and less expensive process for small businesses.
Banking and Lending
Since January 1, 2020, the Illinois Cannabis Regulation & Tax Act has legalized the production, sale, transport and consumption of recreational cannabis. The Illinois Cannabis Regulation and Tax Act also legalized banking for Cannabis Related Businesses (CRB’s) in Illinois, stating that financial institutions assisting CRB’s, such as banks or credit unions, are exempt from state criminal laws.
The incoming governor-elect of Illinois, J.B. Pritzker has promised to pass legislation that legalizes the sale and consumption of recreational cannabis in Illinois for adults over the age of 21. [Read more…] about What Banks in Illinois Should Expect If Recreational Cannabis Becomes Legal
While many lenders, especially SBA Lenders, shy away from Illinois Land Trusts, they actually have benefits for the secured and mortgage lender. Once the Lender takes an assignment of beneficial interest in a land trusts, the Lender has positioned itself to have more control over the collateral and ease of liquidation after default.
The collateral assignment of a beneficial interest in a land trust creates a security interest in personal property that is governed by the by Article 9 of the Illinois Uniform Commercial Code, Ill. Rev. Stat. ch. 26 para. 9-101 et seq. (1987). Upon assigning the beneficial interest, notice will be given to the lender of any subsequent attempts to grant security interests in the collateral and the lender can have veto power over such encumbrances.
One of the favorable remedies afforded to Lenders are non-judicial foreclosures. These foreclosure proceedings are often faster and more economical than traditional real estate foreclosures. The Lender must make sure that the Loan Documents grant this default remedy properly, but with careful drafting a Lender can have many alternatives in liquidation.