As the COVID-19 crisis continues, the unfortunate reality is that some businesses that were prosperous in normal times will fail.  We can expect to see a wave of commercial (and personal, but that is a subject for another time) bankruptcies as a result of this pandemic.  With that grim reality in mind, let's identify some things businesses considering the bankruptcy option should do now.

1. Preserve Cash. As I wrote previously, cash is king in bankruptcy.  The process can be timely and expensive, and those businesses that survive a bankruptcy filing are the ones that maintain flexibility.  Preserving cash is the best way to accomplish this.  This can be done by accurately identifying expenses that can be cut and maximizing any existing revenue streams.
2. Identify Critical Stakeholders. Every business has critical vendors or creditors that must be placated in order to function.  Landlords are the classic example, as a business can't operate if the landlord locks the doors.  Banks with secured lines of credit are another example.  The answer will not be the same for every business, but it is necessary to determine which creditors and vendors are essential to the survival of the business and then determine if and how they can be paid in a bankruptcy scenario.
3. Identify Core Assets. Most businesses have a set of “crown jewels” that drive revenue, and these key assets need to be identified and protected as soon as possible.  Think outside the box here, as key assets can just as easily be personnel as well as physical assets or inventories.  The key is to figure out what the business needs to maintain in order to maximize revenue, and then take all possible steps to ensure that the asset(s) remain intact.
4. Seek Legal Help Yesterday. A common thread in all successful bankruptcy cases is that the business retained bankruptcy counsel as soon as possible.  The bankruptcy process can be a minefield, and steps taken (or not taken) before a filing is even considered can mean the difference between success and failure.  If you feel that bankruptcy is a real option for your business, contact a qualified bankruptcy attorney as soon as possible.