Register: How to Deal with a Customer with a PPP Loan in Bankruptcy

February 23, 2021 | The Paycheck Protection Program (PPP) created a lifeline for many businesses that faced early struggles in the COVID-19 environment. But a new Toy Association webinar “A Brave New [COVID] World: Dealing with a Customer in Bankruptcy That Has a PPP Loan,” addresses the challenges manufacturers and distributors must consider when doing business with customers that obtained a PPP loan before filing for bankruptcy.

Taking place March 25 at 2 p.m. (Eastern), the one-hour session will look at the various issues that arise for debtors that wish to use their PPP loan funds in bankruptcy proceedings and for vendors that continue to do business with those debtors. It will cover whether the bank that issued the loan can block use of the funds; if officers and directors of the debtor can prevent the debtor from using PPP funds to pay vendors; and if vendors who are paid from PPP loan funds may have to return those payments. It will also examine how PPP loan funds used for operations that resulted in revenue might become part of the prepetition lender’s cash collateral, and potentially diminish returns for unsecured creditors.

The webinar will be presented by Jason M. Torf, partner at Ice Miller LLP. Paul Vitale, executive vice president of finance & operations at The Toy Association, will moderate. All toy professionals are invited to attend, although it is specifically recommended for manufacturers, wholesalers, and/or distributors involved in credit, finance, and legal functions.

Registration is now open; the session is free for Toy Association members and $49 for non-members. Questions may be directed to Anne McConnell, senior director of market research & data strategy at The Toy Association.