Many equipment lessees have been hit hard by the economic downturn caused by the COVID-19 pandemic. Inez Markovich and Howard Brod Brownstein outline the rights and remedies of equipment finance lessors and lenders when their customers face temporary distress or a Chapter 11 filing.
Equipment leasing and financing companies play a vital role in the U.S. economy by providing businesses of all sizes with much-needed financing options for acquisitions of equipment used in their business operations. As the COVID-19 pandemic has effectively shut down numerous businesses across the country and will continue to impact various industries, its effects are likely to have significant ramifications for the equipment leasing industry. When an equipment lessor’s or lender’s customer enters financial distress, whether or not it files for bankruptcy protection under Chapter 11 of the Bankruptcy Code, the creditor-lessor or secured lender must have a clear understanding of its rights and remedies to minimize its potential losses.