Getting Through Chapter 11 – Part Two: Plan of Reorganization

A. Thomas DeWoskin

By A. Thomas DeWoskin



turbulencePart 5.2 of a 5-part series: Options for Small Business Owners in Financial Distress

Your company’s Chapter 11 bankruptcy has been filed and you’re now running your business under the provisions of the United States Bankruptcy Code.

It’s now time to work toward the ultimate goal of a Chapter 11: a Plan of Reorganization, confirmed by the court, allowing your company to restructure its debts, exit Chapter 11, and continue in business. It is important that you explain all of your concerns about all aspects of your business to your attorney and provide complete and accurate information, all before you even file the case. This will help both of you develop good ideas for successfully navigating your reorganization case and getting a plan confirmed. Advise your attorney if a new problem develops so you can consider all the potential solutions available to you.

Your next steps in planning for reorganization will include you and your attorney:

  • Participating in two mandatory meetings with a U.S. bankruptcy trustee within the first 30 days after filing and begin filing monthly operating reports.
    1. “Initial debtor interview:” Learn procedural issues such as the ins and outs of filing periodic operating reports such as monthly operating reports and where and how your company can bank.
    2. Section 341 “meeting of creditors:” Be questioned under oath by the U.S. trustee’s office about your need to file Chapter 11, your plan to exit bankruptcy, how you will implement your ideas, etc. This meeting is open to all interested parties.
  • Negotiating the terms of your proposed plan with the creditors’ committee if one has been formed by large unsecured creditors.
  • Negotiating lease terms. Any lease which commenced prior to the filing can be “rejected.” You can then renegotiate the terms or terminate the lease, in which case the lessor’s claim will be treated as a pre-petition claim.
  • Treating an equipment lease as an installment purchase agreement secured by the equipment, possibly converting a portion of the secured debt to unsecured and altering the terms of repaying the secured debt.

Continue reading »

Getting Through Chapter 11 – Part One: After Filing

A. Thomas DeWoskin

By A. Thomas DeWoskin



Part 5.1 of a 5-part series: Options for Small Business Owners in Financial Distress

turbulenceYour attorney has just filed your company’s Chapter 11 reorganization case and you have no clue what to do next. Seriously, the first thing you should do is nothing. Take a breath and keep running your business.

That’s not to say there’s nothing for you to do during the entire Chapter 11 process – there’s actually quite a lot for which you will be responsible. Any competent bankruptcy attorney already has discussed your statutory and practical responsibilities in a Chapter 11 case with you prior to filing.

Now is the time to implement those decisions made before the case was filed. If you forget a decision you made (or come across an issue you hadn’t discussed), call your attorney. The two of you should be in frequent contact during the case to be sure that you don’t take any actions which don’t make sense in the Chapter 11 context, or which might violate the Bankruptcy Code, Bankruptcy Rules, or Local Rules.

Your primary concern after the case is filed is, of course, money to operate with. That topic should be discussed thoroughly with your attorney prior to filing. Be sure your attorney discusses post-petition financing and use of ‘cash collateral’ with you. Be sure that you have post-petition financing lined up before you file, either from internal operations or from a lender. If your post-petition financing falls through, or you’re not as profitable as you expected to be after filing, you may not be able to afford to operate during the Chapter 11. If so, there is  no way for you to reorganize and your Chapter 11 case may be dismissed outright. Continue reading »

Over the Counter COVID-19 Diagnostic Tests Are Required to Be Reimbursed by Your Health Care Plan

Ruth Binger

By Ruth Binger



covid testOn December 2, 2021, President Biden announced that the Departments of Labor, Treasury, and Human Resources (“Departments”) would issue guidance by January 15, 2022, to clarify that individuals who purchase Over The Counter COVID-19 Diagnostic tests (“OTC Tests”) during the public health emergency will be able to seek reimbursement from their group health plans or health insurance plans insurers (Collectively “Plans”).

On January 10, 2022, the Departments updated their guidance to generally require coverage of OTC tests, with or without a prescription or individualized clinical assessment by an attending health care provider. The Plan cannot impose cost-sharing requirements, prior authorization, or other medical management requirements.  The test needs to be for Plan participant’s personal use or for a family member enrolled under the Plan.

How to Purchase? Continue reading »

Business Owners: Private Company in Missouri Wins Challenge to Its COVID-19 Vaccine Mandate

Brian Weinstock

By Brian Weinstock



vaccine mandateMissouri has its first decision on a challenge to a private company’s COVID-19 vaccine mandate. The U.S. District Court of Western Missouri heard a petition for an injunction against Tyson Foods’ COVID-19 vaccine mandate and the company prevailed. In Reese v. Tyson Foods, Inc., Clifton Reese, a Tyson Foods employee, had requested a Temporary Restraining Order and/or Preliminary Injunction against Tyson Foods regarding its COVID-19 vaccine mandate.

In Reese, Tyson announced a vaccine mandate that all employees nationwide to be fully vaccinated by specified dates. The policy stated that employees seeking religious or medical accommodations should contact Tyson human resources “immediately.” Clifton Reese waited a month before making his request for religious accommodation. He refused the company’s accommodation of unpaid leave, but Tyson formally notified Reese that his religious accommodation was granted with the following stipulations:

  1. The accommodation status could change at any time.
  2. Because his accommodation of unpaid leave of absence was not job-protected, the position could be filled if necessary.
  3. If providing the accommodation was an undue hardship to the employer, the accommodation could be revoked. The employee would then have to comply with the mandate or be subject to termination.

Reese filed a complaint with the Missouri Human Rights Commission and sent a demand letter to Tyson to continue his employment under existing COVID-19 restrictions to receive his full bonus, salary, and benefits. During the hearing, the Reese admitted he did not understand benefits he would receive during unpaid leave, such as continuation of health benefits, the ability to look for new employment within or outside of the company, and keeping earned bonuses. Continue reading »

Missouri Employee Not Entitled to Injunctive Relief Against Private Employer’s COVID-19 Vaccine Mandate

Brian Weinstock

By Brian Weinstock



vaccine mandateRecently, Clifton Reese, an employee of Tyson Foods, requested a Temporary Restraining Order and/or Preliminary Injunction against his employer regarding its COVID-19 vaccine mandate in Reese v. Tyson Foods, Inc.

On August 3, 2021, Tyson Foods announced a vaccine mandate which required all employees nationwide to be fully vaccinated by specified dates. Moreover, the policy requested that employees seeking religious or medical accommodations contact human resources “immediately” to allow Tyson time to consider each employee’s request to meet company deadlines. Despite the notification to contact human resources immediately, Reese waited a month before contacting human resources seeking a religious exemption.

In response to his request, Tyson offered Reese an accommodation of an unpaid leave of absence, which he rejected. Tyson then confirmed Reese’s request for a religious exemption from the company vaccine mandate had been granted, the status of the accommodation was subject to change, and if the accommodation was an unpaid leave of absence that was not job-protected, “it may be necessary to fill your position.” Tyson also explained that if providing the accommodation was an undue hardship to the company, the accommodation could be revoked, and Reese would have to either comply with the mandate or be subject to termination.

In response to Tyson’s confirmation of the accommodation, Reese filed a complaint with the Missouri Commission of Human Rights. Reese hired an attorney and sent a demand letter to Tyson demanding that Tyson continue Reese’s employment “with the already existing COVID-19 restrictions in place,” and that he receive his full bonus, salary, and benefits. Tyson said they would review the demand. Continue reading »

Private Employer Mandatory Vaccination Policy With Medical and Religious Accommodations Is Allowed

Brian Weinstock

By Brian Weinstock



covid vaccineRecently, a group of healthcare workers in Kentucky requested a Temporary Restraining Order and/or a Preliminary Injunction from the U.S. District Court of Eastern Kentucky against an employer’s COVID-19 vaccination mandate in Beckerich, et al. v. St. Elizabeth Medical Center, et al. At question was whether a private employer is allowed to modify its employment conditions to require employees to be vaccinated in response to the unprecedented global pandemic known as COVID-19.

In Beckerich, St. Elizabeth’s Medical Center and physicians group implemented a mandatory COVID-19 vaccination policy for its employees. Under the policy, employees could avoid the mandatory vaccination by submitting a request for a medical exemption or sincerely held religious beliefs before October 1, 2021. The policy also indicated that failure of an employee to comply without an accepted exemption could result in termination. The employees argued that the policy violated their constitutional rights and claimed St. Elizabeth’s had not approved religious and medical exemptions to the vaccination policy in compliance with the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964.

Regarding the ADA claims, U.S. District Court Judge David Bunning noted private employers are required to offer medical and religious accommodations but the employees in Beckerich failed to show that St. Elizabeth had not complied with the ADA reasonable accommodations. The evidence revealed St. Elizabeth granted medical exemptions 13% of the time and granted deferments 61% of the time. Only 14% were denied with 10% pending. Judge Bunning noted St. Elizabeth had granted more medical accommodations than there were plaintiffs in the case. No evidence was provided showing that over 5,000 medical and religious exemptions had been requested. The judge determined the employees had very little chance at success on the merits because they failed to meet the key elements to prove an ADA claim.

Regarding Title VII claims, Judge Bunning noted the employees failed to suggest they could raise a preliminary case of religious discrimination. None of the named plaintiffs had been denied a religious exemption with only one marked pending but St. Elizabeth’s noted that request was approved.  Because no religious exemptions were denied, the employees were not able to prove any religious discrimination. Continue reading »

Religious Exemptions to COVID-19 Vaccination Mandates under Title VII and the EEOC’s Additional Guidance

Katherine M. Flett

By Katherine M. Flett



covid vaccineWith continued and widespread COVID-19 infection and the FDA’s full approval of the Pfizer-BioNTech COVID-19 vaccine, many employers have instituted COVID-19 vaccination mandates. Title VII requires employers to provide reasonable accommodations for employees with sincerely-held religious beliefs that conflict with getting vaccinated. Given that religious beliefs are difficult to disprove, many employees have taken this as an opportunity to request religious exemptions to avoid COVID-19 vaccination mandates.

The Law – Title VII

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of religion and requires employers to provide reasonable accommodations to employees claiming their sincerely-held religious beliefs conflict with getting vaccinated. Title VII protects not only people who belong to traditional, organized religions, such as Buddhism, Christianity, Hinduism, Islam, and Judaism, but also others who have “sincerely-held religious, ethical or moral beliefs.”

Given this sweeping definition of religion, the U.S. Equal Employment Opportunity Commission (“EEOC”) has cautioned that an employer should generally assume that an employee’s request for a religious accommodation is based on a sincerely-held religious belief. Nevertheless, an employer is permitted to question the sincerity of an employee’s purported religious belief where there is an objective basis for doing so. Further, an employer is not required to accommodate an employee’s religious beliefs and practices if doing so would impose an “undue hardship” on the employer’s legitimate business interests. For the EEOC’s list of factors to be considered when determining whether an accommodation imposes an undue hardship on an employer, visit: EEOC Undue Hardship.

The EEOC’s Guidance on Religious Exemption Requests

On October 25, 2021, the EEOC updated its technical assistance related to the COVID-19 pandemic, which included additional guidance on how employers should handle religious exemption requests (Section L). Read the full EEOC update here.

The key takeaways are:

  1. Employees who have a religious objection to receiving a COVID-19 vaccination must inform their employer and request a reasonable accommodation to be afforded protection under Title VII. Reasonable accommodations may include telework or reassignment.
  2. If an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, the employer can make a limited factual inquiry seeking additional supporting information.
  3. An employer who objectively demonstrates that it would be an “undue hardship” to accommodate an employee’s request for religious exemption to the employer’s vaccination mandate is not required to provide the accommodation.
  4. An employer is not required to grant all employees’ requests for religious exemptions on the basis that it has granted some employees requests for religious exemptions. The determination is fact-intensive and specific to every request.
  5. While an employer should consider the employee’s preference, if there is more than one reasonable accommodation that would resolve the conflict between the vaccination requirement and the religious belief without undue hardship, the employer may choose which accommodation to offer.
  6. An employer has the right to discontinue a previously granted religious accommodation. If the employer learns that the belief is not religious in nature or sincerely-held, or if the accommodation becomes an undue hardship, the employer can discontinue the accommodation.

Continue reading »

Does Business Interruption Insurance Cover COVID-19 Losses?

Jeffrey R. Schmitt

By Jeffrey R. Schmitt



Authored by Jeffrey R. Schmitt, with assistance from Haley E. Gassel, contributor

business interruptionBusiness interruption coverage is like most insurance for small businesses – we pay for it with the hope we never need it. The coverage is intended to protect against revenue lost after a business experiences a covered peril or event which results in a temporary closure. Often this involves a casualty event like a fire or flood, or the inability to operate due to loss of utilities or information systems.

However, businesses across the country have filed claims with their insurers seeking business interruption coverage for COVID-related losses.  This is a theory that, fortunately, most businesses have never had to claim in the past. Some claims have found their way to the courts for determination. The issue often boils down to whether there is physical loss or damage to the policyholder’s business location to trigger business interruption coverage. Some policies include coverage for communicable diseases as well.

While most business interruption coverage lawsuits have not concluded, some recent decisions by federal courts in Missouri have been favorable for businesses seeking coverage. This is due in part to ambiguities in the policies and the lack of prior court decisions involving business interruption claims based on a pandemic. In many ways, these are uncharted waters for the litigants and the courts. Continue reading »

Eviction/Foreclosure Moratorium Changes and the Consumer Financial Protection Bureau’s Final Rule on Foreclosure

Brian Weinstock

By Brian Weinstock



eviction moratoriumOn June 24, 2021, the Centers for Disease Control (CDC) extended its eviction moratorium order which was set to expire on June 30, 2021.  According to CDC Director Dr. Rochelle Walensky, the eviction moratorium will now expire July 31, 2021 and is intended to be the final extension.

Just a few days later, the U.S. Supreme Court denied a request by a group of landlords to allow a federal judge’s decision to block the eviction moratorium to go into effect nationwide while litigation disputes continued to vacate a stay order from Federal Judge Dabney Friedrich that declared the CDC moratorium unlawful (see “Federal Judge Dabney Friedrich Vacates CDC Nationwide Eviction Moratorium”). Washington-based U.S. District Court Judge Dabney Friedrich ruled in favor of the landlords in May 2021 but put her ruling on hold pending the government’s appeal in the case. The landlords appealed to the Supreme Court after a lower appellate court rejected their request to unfreeze Judge Friedrich’s ruling. The landlord groups, led by the Alabama Association of Realtors, sued to challenge the moratorium, arguing that the CDC exceeded its authority under a federal law called the Public Health Service Act. They wrote in court papers: “Congress never gave the CDC the staggering amount of power it now claims.”  The groups said an eviction ban is no longer needed for public health reasons in light of declining COVID-19 cases and deaths. They also cited the CDC’s May 13, 2021 announcement that vaccinated people no longer need to wear masks or practice social distancing indoors. Continue reading »

Mandatory COVID-19 Vaccines in the Workplace Update: Ruth Binger Interview

Ruth Binger

By Ruth Binger



covid vaccineRuth Binger spoke with KMOV Channel4 News about a possible increase in companies requiring the COVID-19 vaccination for their employees.

According to Ruth, the fact that the vaccination does not yet have FDA approval is keeping many companies from considering a mandatory vaccination policy at this time. To date, none of her clients have a mandatory policy in place. “I do think it’s changing a little bit because of the Delta variant, and now [companies are] thinking about whether or not they should have a mandatory policy.”

Ruth said that another concern employers about enforcing a mandatory COVID-19 policy is the national worker shortage. Continue reading »

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