On Monday, March 16, 2020, the City of Boca Raton declared a Local State of Emergency due to the threat of COVID-19 and has implementing additional closures and safety measures in order to slow the spread of the virus. Effective at 5:00 pm on March 16, 2020, all bars and nightclubs are required to close for 30 days. In addition, all restaurants are required to close except for drive through, take-out and delivery services until further notice. This followed Florida’s state-wide Executive Order requiring the closure of bars and night clubs for 30 days as well as a requirement for restaurants to operate at 50% capacity with tables adequately spaced apart.
It is impossible at this time to estimate the impact this state of emergency and the executive order will have on our business or on your employees. In all likelihood, your business, even those outside of the restaurant and hospitality industry, will suffer some form of financial impact and may be unable to pay some or all of its normal monthly expenses, such as rent, vendors or even employees. While we are all uncertain what the impact will be for your business, your employees and your families, we are certain that there are solutions and steps to mitigate these problems. During the period of pause is an opportunity to sit down (or video conference) with an attorney to map out a strategy to implement not only what to do during the closure, but also how to recover moving forward when our lives return to normal as soon as possible. Below are some general considerations:
- Vendors: Evaluate contracts with any critical vendors. Do terms need to be modified to survive? Is there personal exposure?
- Employees: What options are available when determining whether to maintain employees during this time?
- Bridge Loans: What financing sources are available to help during this particular period? Is there a government program? What are the long term consequences of these loans? What issues should I negotiate?
- Landlords: What options are available under the lease? How and when to approach a landlord? Is there an opportunity to modify the lease?
- Insurance: Are any of the issues you are experiencing covered? What notice is required? When will your losses be paid?
- Bankruptcy or Insolvency Proceeding: Do I need to file for the company to reorganize the debts to move forward in the future? Do I need to personally consider filing?
We recognize there is no “one size fits” all approach. We have experience in a variety of hospitality creditor workouts and bankruptcy proceedings including, among others, the Versace Mansion and the Inverrary Resort Hotel. Below is the contact information for our restructuring attorneys if you would like to consider your options: