Daily Archives: April 7, 2020

First Response

Max Gardner is one of Americas great bankruptcy attorneys. For years, hes been running a bankruptcy boot camp for his fellow attorneys, in his wooded redoubt in the hills of North Carolina. Normally the event has a few dozen lawyers. He did his first webinar boot camp about a week ago: 776 attorneys signed up. I really fear something worse than the Great Depression, Gardner told me. Every system is going to be overwhelmed.

Bankruptcy has so far been spared this crush; new filings are kind of a lagging indicator, since it is a last resort for people at a low point. The cases arent likely to start piling up for a few months. But Rohan Pavuluri, CEO an co-founder of Upsolve, a large non-profit that assists bankruptcy filers, has already seen intense interest. Seven of the top ten referrals to Upsolve have the term COVID or coronavirus in them. Theres been ten times more interest in the groups COVID-19 FAQ page than its homepage.

That page explains some of the realities of bankruptcy since the 2005 reform law (paging Joe Biden), particularly for those who cant afford an attorney, the kind of people Upsolve assists. If you cannot afford a lawyer, you cannot file electronically in the vast majority of districts, you have to mail or hand-deliver, Pavuluri explains. Of course, most bankruptcy courts are closed, making hand-delivery impossible and mailed-in documents unlikely to reach anyone. Just printing the forms without access to a workplace could be prohibitively expensive and hard to do.

Its not just pro se filers who are burdened. Gardner uses a pre-recorded YouTube video to explain the process to clients. But there are certain notices and disclosures that attorneys must make within a certain number of days; the pandemic makes this difficult. This is of course all by design; the bankruptcy bill made it nearly impossible for individuals to file for bankruptcy. The pandemic just raises the hurdles, particularly for those already in bankruptcy.

That includes people like Catarina Lopez. Her 341 meeting with creditors, a requirement for discharging debt, has been delayed a month. It changed all my plans I had for the next year, she told me. Lopez was planning to go back to school for a Masters degree but owes money to the university where she got her bachelors. They wont release her transcripts without being paid, and without the bankruptcy hearing advancing, that payment cant be discharged. Until then I have a financial bar on going to another school or getting a decent job, she says. Lopez was planning to get married and move to Australia, where her partner is currently. Due to the pandemic, shes stuck with her grandmother in Texas, waiting for the bankruptcy to resolve, while my partner is on the other side of the world.

The U.S. bankruptcy trustee could create standard rules that increase access in all bankruptcy courts, requiring options like videoconferencing. The Supreme Court could also enact an emergency rule. But that hasnt happened yet. One big issue, we require what we call wet signatures for every document, says Gardner. The debtor has to sign fifteen times. At the request of the bar, my court has waived that requirement. But its a big issue all over the country that has been done district by district. Theres no national policy or strategy.

Another concern is that the $1,200 direct payments in the aid package passed last week will be treated as an asset in bankruptcy, and eligible for creditors to seize. Its not 100 percent clear to me that its exempt from the trustees trying to say its like you won a scratch-off card, and turn that money over to me, says Gardner. Another part of the bill allows an extension of the bankruptcy timeline from 5 to 7 years, which would reduce peoples monthly payments. But that only applies to existing, not new cases. If you applied after the bill passed, when your financial life went into upheaval, you wouldnt get the benefit.

Pavuluri, of Upsolve, explains that the system is discriminatory against those who need it the most. Its a huge injustice, he says, that people facing financial challenges cant access specific laws that help them.

I was on WORT-FM in Madison, Wisconsin for an hour discussing the crisis. You can listen here.

If you must pore over the statistics (Ive explained why Ive lost faith in the numbers here), you can find them at New York Times, Johns Hopkins University, the COVID-19 Tracker, this hospitalization tracker, and elsewhere.

Also, heres an edition of Unsanitized translated into German, if that works for you.

The Paycheck Protection Program (PPP) rolled out yesterday, if by rolled out you mean kinda sorta got started amid mass confusion. Most banks were simply unavailable to administer the program. Among large banks, only Bank of America was ready to take initial applications, and as I mentioned yesterday, they only accepted applicants with both a deposit and lending relationship with the bank. People with 20 years of history with BofA were turned down.

The reason for this is pretty simple: the rules of the program show that anyone with an existing lending relationship does not need to be tested again for compliance under the Bank Secrecy Act, really the only thing banks are liable for. JPMorgan Chase requires only an active checking account. But the lending relationship saves banks money and time on compliance, so I predict that will be the standard. If you run a cash business and didnt need to go into debt with it, odds are you wont get a PPP loan. Sen. Ben Cardin (D-MD), ranking member of the Small Business Committee, joined chair Marco Rubio (R-FL) in condemning banks for this, but this is what happens when you run a government program through self-interested private companies.

Meanwhile, BofA announced that on day one, they received 85,000 applications worth $22.2 billion. Thats about 6 percent of the total $350 billion in the fund. Do the math and you figure out a couple things. First, all this money will be gone as soon as the rest of the big banks open their application process, if just one big bank processed $22 billion in a day. I suspect it closes on Monday. Second, extrapolate out to $350 billion using these numbers and you get about 1.34 million applicants. The estimate is there are 30 million small businesses out there. About 4.5 percent of all of them will have a chance to get relief. Half of small businesses havent paid rent in April, which if Im doing the math correctly is more than 4.5 percent. And millions of them will have no federal help, no customers, and really no hope.

Mitch McConnell has reluctantly signaled there will be a phase 4 bill, and refilling this program is atop the agenda. But it may be too late by then.

Last night, President Trump fired Michael Atkinson, the inspector general of the intelligence community, who accepted the whistleblower complaint that led to his impeachment. Thats a baseline example of what Trump thinks of oversight. The fact that he nominated a White House lawyer as inspector general for the pandemic bailout at roughly the same time fits the paradigm.

In 2008, on his way out the door, George W. Bushs final appointment was the inspector general for the TARP bailout, and (because he faced a Democratic Senate and was termed out and wouldnt have to deal with the guy anyway) he picked Neil Barofsky, a Democrat but a respected federal prosecutor. Heres a great interview of Barofsky by Bill Moyers from this week. Thats who you would expect for this position: someone who can police fraud and ensure integrity. Trump has no integrity and approves of fraud, therefore he picked a crony for the same position. Brian Miller, the White House lawyer in question, responded to document requests during impeachment. He was also once an inspector general, for the General Services Administration, and if you read in Barofskys book Bailout about the careerist cowardice of the inspector general corps, thats even worse.

Regardless of the personnel, the oversight of this bailout would be lacking. Barofsky and Elizabeth Warren ran oversight on the last bailout, and they were hamstrung because they only saw details after the money left the building. Thats the oversight structure adopted for this bailout. It borders on useless, and Trump is utterly committed to making it more useless. Oversight was a fig leaf from House Democrats to show they werent totally marginalized as corporate America rolled around in trillions of dollars. Trump is just showing how absurd and ineffective that fig leaf was.

Read more from the original source:

Unsanitized: How People Seeking Bankruptcy Will Suffer in the Pandemic - The American Prospect

USA Rugbys recent Chapter 11 bankruptcy declaration was little surprise and could ultimately prove beneficial in the long term, according to Rugby United New York majority owner James Kennedy.

Late last month, the governing body for rugby union in the United States filed for bankruptcy as a result of compounded and insurmountable financial constraints.

The indefinite suspension of sanctioned activities and, in turn, loss of income streams caused by the ongoing Covid-19 pandemic has accelerated existing financial challenges facing the union.

World Rugby, the sports global governing body, will step in and implement a series of governance and financial measures to help the union find a way forward and emerge from the bankruptcy proceedings.

USA Rugby will operate with a reduced staff and budget from its headquarters in Lafayette, Colorado,through the remainder of the restructure.

It should have happened at least a year ago, if not two years ago when [former USA Rugby chief executive] Dan Payne was leaving, Major League Rugby team owner Kennedy toldRugbyPass. They were always fighting a rearguard action. There is plenty of me on the record on this, so its not Monday Morning Quarterback. Bankruptcy is what they needed to do.

It was no individuals fault, as there was chopping and changing personnel. It was a system that was just built to fail in a weird way. It was chronically underfunded and because it was underfunded it wasnt able to get the money it needed.If they got their membership policies right they would be the wealthiest union in the world, but they couldnt even do that because they didnt have the money or the resources.This needed to happen. I feel bad for vendors that are owed money, but to say the bankruptcy is because of Covid is a bit disingenuous, Kennedy said.

In November, USA Rugby revealed it expected significant financial losses in 2019. This, the national governing body said, was due to over-expenditure in its high performance program leading up to and during the 2019 Rugby World Cup, legal fees in two ongoing lawsuits, and revenue shortfalls.

Financial troubles at USA Rugby are nothing new. The collapse of for-profit subsidiary Rugby International Marketing (RIM) and the Rugby Channel, a subscription-based online streaming service which offered exclusive live and on-demand coverage of top-tier domestic and international rugby matches,almost bankrupted the union in 2018.

Its no secret that USA Rugby have been financially fed for years, the outspoken Kennedy said.

USA Rugby is now pinning its hopes on being awarded the 2027 or 2031 Rugby World Cup to transform its financial fortunes.

Bankruptcywill make the (2031) World Cup bid process easier, Kennedy said. I dont want to say any names, but the void will be filled with competent people and competent organization.

It is a good thing. I say that with respect to people that have lost their jobs, people that are not getting paid, but its a good thing for rugby in the US ultimately.If it cleans up the World Cup bid which is going on right nowanything without US Rugby involved is a better situation than having them at the table where they swear they are good when everybody knows they are not good. This is a good opportunity, he said.

More here:

USA Rugby bankruptcy is a good thingand should have happened a year ago - SportBusiness

For retailers, facing an apocalypseisn't anything new. What's new is the fact that everyone else is too.

Retail has for years faced the challenges of slowing foot traffic, changing shopping patterns and online competitors that has caused an industry upheaval some analysts have deemed the "retail apocalypse."

But as the coronavirus pandemic has ground U.S. business to a halt, the pain has spread far and wide to upstart retail brands, landlords, lenders and suppliers. With everyone in duress, landlords and creditors with the ability to pull the trigger that could put a retailer into bankruptcy have become gun shy.

"Everyone has a gun to their head," said one banker requesting anonymity. "It's mutually assured destruction."

In March, there were four retail bankruptcies, according to Debtwire parent Acuris. That's more than the two retail bankruptcies that occurred in the same month last year, but it doesn't reflect the pain that has crippled the industry which has been forced to shutter its stores.

State governments are telling Americans to avoid crowds and ordering nonessential businesses shut. With nowhere to go, Americans have little reason to shop the inventory that retailers have already stocked. Macy's marketcapitalization has dropped from about $6 billion in mid-February to $1.5 billion.Fast-fashion retailer H&M has said it is weighingtemporarily laying off tens of thousands of workers worldwide.There could be a record-setting 15,000 store closures this year, according to Coresight Research.

But unlike prior crises that swept other industries, the issue isn't simply that the retail business is broken the problem is that there's deep uncertainty about when the pandemic will end and what the world will look like after the crisis is over. That's not a problem bankruptcies can solve, and it's not a problem many lenders want to take on themselves.

When Delta, United Airlines and U.S. Airlines filed for bankruptcy in the wake of Sept. 11, they were able to shed onerous debt, restructure labor contracts and reduce capacity. They did, in fact, emerge stronger companies than they were prior to bankruptcy.

Retailers, though, are facing a cash-flow problem, not just a structural challenge. They're not bringing in money because they can't operate. Any retailer weighing filing for bankruptcy has no idea when stores may reopen again, and what the world will look like when they do.

"Filing for bankruptcy doesn't create a sudden cure for the virus, it doesn't create a cure to open stores so why incur the expenses of Chapter 11 when you're not going be able to do anything while business is closed?" said Michael Sirota, co-chair of the bankruptcy and corporate restructuring department at Cole Schotz

Landlords and creditors, which are sometimes one in the same, are aware of that reality.

Luxury retailer Barney's filed for bankruptcy last year after its landlord raised the rent that wiped away its earnings. But Barney's landlord likely believed it had other alternatives to replace the retailer in its prime real estate, like Manhattan's Madison Avenue. Now, with virtually every retailer's stores shuttered, there is no easy replacement to stand in on a property.

Instead, landlords are in their own pain and facing their own uncertainty. The nation's largest mall owner,Simon Property Group, has temporarily closed all its more than 200 malls and outlet centers. When and how many malls it reopens will significantly impact the economics of its business.

"There is disruption in the real estate market and a lot of unknown in retail: is the mall going to be there or not? Will I have cash or not?" saidChrista Hart, senior managing director at FTI Consulting.

Debt-holdersthat have the ability to help force a company into bankruptcy if it is late on interest payments or violates its covenants are aware of this reality, say bankruptcy bankers and lawyers. It makes it difficult for them to negotiate the terms of emerging from bankruptcy, because there is no clear view of what retail looks like in one month or three months. There is limited upside forcing a retailer to liquidate because it is nearly impossible to hold a liquidation sale with retailers forced close.

Modell's recently had to pause its liquidation efforts, because its liquidation sales ran right up against government guidance to stay home. The sports retailer had filed for bankruptcy on March 11 and began its closing sales March 13. The same day, President Donald Trump declared a national emergency over the coronavirus pandemic and the U.S. economy began to shut down.

"It's not as if we were using the space or premises and selling inventory and not paying them," said Sirota who advised Modell's on the bankruptcy "We were deprived of that access."

The landlords agreed in that case to delay rent payments.

With liquidation sales seemingly untenable in the short term, there is also little desire to finance bankruptcies. Financing bankers who spoke to CNBC on the condition of anonymity said while it may be possible to get financing for bankruptcy from existing lenders, the bar has been raised significantly for new lenders. That stands in contrast to bankruptcies like Toys R Us and even Sears, when banks lined up to offer assistance.

That's not to say there won't be retail bankruptcies, particularly for companies with impatient investors or with already significantly broken businesses. Once the cloud of uncertainty lifts, there will likely be many more.

But until then, though, for most retailers, the only option is to cut costs. Macy's and Kohl's have furloughed most of their employees. Retailers are slashing investment, putting projects on hold, and culling through other expenses like outside consultants. They're also delaying their payments to the brands that have already shipped product to help conserve their cash, say sources familiar with the situation.

Some have thought about tapping the pool of money laid out for business in the $2 trillion CARE act, lobbyists have told CNBC, but it remains unclear how quickly they can get those funds. The government has implied it will attach tough strings to any loans it offers to large businesses, like requirements around headcount that industries with high-fixed costs like retail are wary to commit to.

Some retail companies are also pushing for relief in a potential fourth package, lobbyists said.

The separation of winners and losers that was already happening in retail will continue, but at an expedited pace.Department stores will suffer, weighed down by large real estate footprints that make little sense to today's shoppers. Those that have been strapped with debt and unable to invest in their business will fall further behind. Many apparel brands will struggle to compete. And Walmart will be a survivor.

"In the summer, it will be where we thought the industry would be in five years," said FTI's Hart.

CNBC's Lauren Thomas contributed to this report.

See the article here:

Coronavirus effect: Bankruptcies won't save retail this time - CNBC

Bankruptcy is one option Quorum Health Corp. is considering as the COVID-19 pandemic weighs on the already struggling for-profit hospital chain.

Brentwood, Tenn.-based Quorum revealed in a Securities and Exchange Commission filing it is in talks with its debt holders regarding a recapitalization or financial reorganization transaction that may include voluntarily filing for Chapter 11 bankruptcy. The company stressed the need to grow liquidity and continue patient care and hospital operations.

Quorum CEO Robert Fish said in a statement that regardless of the path forward, Quorum and its hospitals will maintain all operations without interruption.

"Our facilities play a critically important role in their communities and the fight against COVID-19," Fish said. "We are intensely focused on ensuring our employees have the resources they need to provide quality care to the patients and communities they serve, now and well into the future."

Meanwhile, the investment group Mudrick Capital Management, which owns roughly 10% of Quorum's shares, warned the company in a March 23 letter on behalf of its shareholders not to enter bankruptcy.

David Rosner, a partner with Kasowitz Benson Torres in New York who represents Mudrick, explained that through a bankruptcy filing, Quorum and its bondholders may be seeking to wipe out the company's shareholder value and deliver the value to its bondholders, including the private equity firm KKR and Goldman Sachs.

"The board of Quorum has an absolute duty to its shareholders, not its bondholders," Rosner said. "To Mudrick and the people who hold the shares, not to give that value away, but to maximize it."

Quorum has struggled financially since its 2016 spin-off from Franklin, Tenn.-based Community Health Systems, including posting more than $300 million in net losses in 2017 and 2018 combined. The company is down to 24 hospitals, from 38 when it was spun off.

Nevertheless, Rosner maintains that Quorum still has value as a company, and will receive additional liquidity from the government through the federal stimulus known as the Coronavirus Aid, Relief, and Economic Security Act. Further, Rosner said the partnership with R1 RCM that Quorum announced last year will add operating income.

"We think the metrics are pretty clear that the business itself is sound," he said.

Mudrick has not received a response from Quorum's board.

Quorum, whose shares lost about 20% of their value on Friday, operates hospitals in rural and mid-sized markets across 14 states. Together, the hospitals have almost 2,000 beds.

In the SEC filing, Quorum said the company will be late in filing its year-end 2018 financial report, as management is absorbed in conversations about the company's future. Quorum said it anticipates filing that report no later than 15 days following its original due date.

The private equity firm KKR is Quorum's largest debt holder. KKR also owns about 9% of Quorum's common stock.

KKR in December offered to buy out the embattled company's public shares held by minority owners for $1 per share. The deal would have included restructuring Quorum's debt and injecting new capital. In an update filed March 10, KKR said that discussion has shifted from a take private transaction to a reorganization, with no assurance that Quorum's shareholders will receive any consideration.

Read more from the original source:

Quorum considering bankruptcy as it struggles to stay afloat - ModernHealthcare.com

Chesapeake Energy (NYSE:CHK) is likely headed towards bankruptcy. Dont be fooled about this. CHK stock will then be worthless if that occurs. This is not a huge turnaround play.

Source: Casimiro PT / Shutterstock.com

The evidence is pretty clear. On March 16, CHK management hired two well-known restructuring firms, Kirkland and Ellis as well as Rothschild, according to Reuters.

A recent Seeking Alpha article by WYCO Researcher skillfully analyzes Chesapeakes current debt situation. The author shows that CHKs massive $9 billion in debt will likely not be able to be handled by the company in 2021.

Despite Chesapeakes futures hedging for 2020, its debt maturities in 2021 will cause problems. In addition, low futures prices for 2021 will severely limit its options to survive.

Moreover, there are numerous tranches of debt on CHKs balance sheet. This will also make operating without a restructuring solution very difficult.

The Wall Street Journal chronicled the background to Chesapeakes latest predicament in an article on Jan. 1, 2019. The piece describes Chesapeakes switch from a focus on natural gas production to shale oil just as the prices of oil had fallen 40%.

Little did they know that oil prices, then down 40% from their peak, would continue to crater. Chesapeake made a big bet on finding oil in Wyomings Powder River Basin using fracking.

The problem, though, was that drilling in the heterogeneous rocks that are frequently laced with faults made drilling more expensive. It costs Chesapeake Energy roughly $8 million to drill and hydraulically fracture each of its wells in Wyoming, compared with about $6 million in the Eagle Ford shale of South Texas.

Chesapeake spent $4 billion on an ill-timed acquisition of Wildhorse Resource Development Corp. On top of that the company came with $1.1 billion in additional debt.

Chesapeake had over $9.4 billion of debt on its balance sheet as a result of these developments. Then the price of oil tanked even further, as we know. Now the company still has $9 billion in debt. It has little chance of working its way to paying it down without a restructuring.

Bloomberg also recently chronicled Chesapeake Energys attempt at the end of February to raise even more debt to work out of its situation. At that time CHK stock was trading for just 30 cents per share. Today it is just seventeen cents.

CHK shareholders will vote April 13 to approve a reverse stock split ranging from 1-50 to 1-200. The board will decide the actual amount. The reverse split is needed to retain Chesapeakes stock listing on the New York Stock Exchange.

For example, with a 1 for 50 reverse split, every existing 50 shares will receive one new share of CHK stock. As a result, the stock price will rise by 50 times from seventeen cents to $8.50 per share, since there would be 50 times fewer shares outstanding. A 1 for 200 reverse split would push the stock price to $34 per share.

Typically reverse splits are done for companies like CHK which are being threatened with delisting. Its usually a sign of a company in trouble. It is no magic wand that will push the stock higher, although that often occurs.

So be careful about this. If the restructuring team manages to avoid bankruptcy, which seems highly unlikely, the next most likely thing to occur is the following: a massive dilution of shareholders.

In effect, shareholders will have to make room for debt holders in the common stock capitalization table. Debt holders will likely demand not only majority control but likely supermajority control. This will be the price for letting go or loosening the debt structure presently strangling Chesapeake Energy.

Here is the bottom line: be very careful with CHK stock. This is a turnaround play that is highly likely to not turn around. Chesapeake Energy will likely end up in bankruptcy.

As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs theTotal Yield Value Guidewhich you can reviewhere.

Excerpt from:

Chesapeake Energy Is Headed Towards Bankruptcy - Investorplace.com

Hawaiis job losses and business shutdowns from COVID-19 have yet to show up in the Bankruptcy Court filings, but it appears to be only a matter of time before the court gets overwhelmed.

This could be unparalleled from what I can see right now, said Honolulu bankruptcy attorney Greg Dunn, adding that his cases are surging. I thought the last recession was worse, but this could be the mother of all recessions.

In March bankruptcy filings fell statewide from the year-earlier period for the second time in three months. But the trend is upward, as they have increased each month so far this year. There were 141 filings last month, six fewer than the 147 in March 2018, according to data released Wednesday from the U.S. Bankruptcy Court, District of Hawaii.

Dunn said his phone is ringing off the hook because most of his appointments are done remotely due to social distancing.

Its very busy and its going to get busier, Dunn said. Bankruptcy is usually a lagging indicator (when people file as a last resort). But these are different times that we live in. Things are totally different now. Things are happening so fast with the coronavirus from just a month ago with all these people losing their jobs. Its not lagging behind. Ive never seen it like this before.

Dunn said hearings and meetings of creditors are being conducted by teleconference even with the Bankruptcy Court closed physically. Filings are done online.

These people who live paycheck to paycheck, once they stop getting a paycheck, theyre going crazy, Dunn said. When they couldnt pay their rent on April 1, what do you you think is happening? Not very good. They have to use their money to buy food.

In what could be the last down period for a while for bankruptcy cases, Chapter 7 liquidation filings the most common type of bankruptcy dipped 3.6% to 106 last month from 110 in the year-earlier period. Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, fell 5.6% to 34 from 36. There also was an unusual Chapter 15 filing, which allows foreign debtors to gain access to U.S. bankruptcy. There were no Chapter 11 reorganization filings last month but one in the year-earlier period. Chapter 11 files are typically used for business reorganizations.

Bankruptcies fell in three of the four major counties. Honolulu County filings fell to 100 from 105, Hawaii County filings declined to 10 from 16 and Kauai County filings dipped to seven from nine. Maui County filings rose to 24 from 17.

SEEKING RELIEF

Bankruptcy filings in March fell from a year ago.

2020 2019 PCT. CHANGE

Chapter 7 106 110 -3.6%

Liquidation

Chapter 11 0 1

Business reorganization

Chapter 13 34 36 -5.6%

Individuals with regular sources of income set up plans to pay creditors over time

Chapter 15 1 0

Allows foreign debtor to gain access to U.S. bankruptcy

Total 141 147 -4.1%

Source: U.S. Bankruptcy Court, District of Hawaii

Read more:

Bankruptcy attorney says Hawaii could see 'mother of all recessions' - Honolulu Star-Advertiser

The proposed extension will give tenants time to begin to stabilize their income, comply with Governor Wolfs stay-at-home order, which now extends to the end of April, and work with their landlords to enter into new payment agreements, the 13 groups wrote in a letter addressed to Philadelphia Mayor Jim Kenney and City Council.

They argue that lifting the eviction moratorium as soon as the state of emergency is over wont allow people time to earn enough money to pay past-due rent.

And, they add, the shutdown of nonessential businesses is keeping some people from being able to move out by the agreed-upon date on their lease. Realtors are not showing properties in person, and moving companies are similarly hard to hire due to the shutdown.

Fifty-one percent of city residents are renters. The group says failing to protect them beyond the state of emergency could trigger mass evictions that will cause major destabilization for the City, its renters and its landlords.

But landlords have their own bills to pay.

Paul Cohen, the general counsel for the Homeowners Association of Philadelphia (HAPCO), said landlords in the city have been working with renters during the pandemic, and his group came out early on in support of a federal freeze on evictions and foreclosures.

However, he said landlords are afraid about their own futures and want to see more protections, too.

Your small landlords are people that dont have a lot of money. Theyre not wealthy people. Theyre people that are trying to make a go of it with what little they have, Cohen said, adding that about half of Philadelphias rental units are owned not by big companies but by individuals who own anywhere between one and four units.

Those people, he said, still have to pay property taxes and mortgages.

The $2 trillion federal coronavirus relief plan does give property owners government-backed mortgage forbearance, essentially a way to temporarily reduce or defer payments to some lenders. Councilmember-at-large Helen Gym said forbearance will help a sizable percentage of Philadelphians, but Cohen pointed out that property owners will still have to make interest payments.

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Tenants fear eviction. Landlords fear bankruptcy. How can Philly balance the two? - WHYY