The COVID-19 pandemic not only lost its life, but claimed its existence. Many companies and individuals are on the verge of bankruptcy.
Financial experts predicted a “tsunami” of bankruptcy filings, but thanks to government aid in the form of stimulus controls, loans to businesses and moratoriums on evictions, the big wave has evolved more slowly than expected.
Lamar Hawkins, a lawyer with Guidant Law, tells ABC15 that right now he sees many small companies filing for bankruptcy.
Enough to keep him at work 12-14 hours a day, and Hawkins predicted that a wave of individual deposits would follow.
One of his clients was the owner of the motel Robert McDowell. McDowell owns Canyon’s End Motel in Meadview, Arizona.
The city is located on the edge of the Grand Canyon near Lake Mead.
“This place was doing well. It’s in a great location,” McDowell said, adding that he bought it as an investment in order to return the motel to become profitable and possibly resell it one day.
McDowell and his wife had fallen in love with the scenic area and the wonderful people in the community.
“We’ve doubled the business here. We’ve had people from 39 countries stay here around the world because we’re right where the Grand Canyon ends, so they come to see Sky Walk in the nation of Hualapai,” McDowell said.
The motel was booked nine months in advance at the beginning of the year, but on March 15, 2020, the world, as they knew, came to a standstill.
“Unfortunately, President Trump had to restrict flights from Europe and other parts of the world and it was like stopping a fire hose. It all stopped cold,” McDowell said.
The nation of Hualapai has closed its roads to visitors and businesses have been closed due to the COVID-19 pandemic. Governor Doug Ducey then closed the Grand Canyon.
McDowell said the pandemic brought uncertainty and made him feel helpless because he could do nothing.
“No one wants to go bankrupt unless they have to. It’s really the last resort for anyone,” McDowell said.
“Bankruptcy was the last resort. There is all kinds of embarrassment and stigma that fit in with that,” he added.
McDowell decided to file because he said it was the only way he knew to save his motel.
Thanks to a new law passed in 2020, it has managed to take advantage of subchapter 5.
The law has been a lifeline for small businesses trying to stay afloat. It’s a way to repay your creditors on time, rather than giving up your assets immediately.
You can find out more about subchapter 5 by clicking here.