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After over a year of uncertainty and financial stressors, is a wave of business failures and restructurings about to come crashing down upon us? Michael M. Beal thinks so.

“Bankruptcies are usually a lagging indicator,” he says. “Oftentimes when you have a recession, or you have a financial crisis, it's months — or could be more than a year — before the problems manifest themselves. We have now passed a year due to the trillions of dollars of liquidity injected into the economy by the government, voluntary forbearance by banks and landlords, and no court hearings.”

Beal — a certified specialist in bankruptcy and debtor-creditor law and founding member of Beal, LLC in Columbia — detailed the many issues businesses might have to deal with in his recent article for SC Lawyer. The piece serves as a high-level reference tool for Palmetto State lawyers who dabble in bankruptcy or need a refresher on the practice area.

Though it takes time for these issues to cause a business to consult counsel, he stresses the importance of looking ahead and being prepared.

“It’s always good to be thinking about these things before your client walks in your door and says ‘Gee, I have a problem, there is a foreclosure sale tomorrow.’” he says. “If I can help educate lawyers about some of the pitfalls along the way, we might be able to help them help their clients save their business.”

Beal began his career through a “once in a lifetime” opportunity clerking for the Honorable J. Bratton Davis, Chief United States Bankruptcy Judge, District of South Carolina.

“It was two of the best years of my life,” he said. “I had a wonderful time with him. We developed a great rapport and became lifelong friends, and I learned a lot from him — not just about the bankruptcy code or the practice of law, but also about life and the more important things.”

After his clerkship, he pioneered the bankruptcy practice at McNair Law Firm. After 30 years with the firm, he formed Beal, LLC, a boutique restructuring firm focused on helping financially distressed business clients.

Even over a year into the COVID-19 pandemic, Beal knows there’s still an uncertain future ahead. The long-term implications of impending business failures and restructurings are still unclear, but many practitioners have little or no recent experience with insolvency because bankruptcy filings have decreased since 2012 due to low interest rates and booming economies.

“It's too early to forecast exactly how,” he says. “But I think the pandemic is going to forever change the way our clients do business and the way we practice law.”