An Introduction to Business Calendar, the Business Recovery Program, and Virtual Hearings, 0520 RIBJ, RIBJ, 62 RI Bar J., Special COVID-19 Issue, Pg. 3

AuthorHon. Brian P. Stern Hon. Brian P. Stern Associate Justice Rhode Island Superior Court, Christopher J. Fragomeni, Esq. Christopher J. Fragomeni, Esq. Shechtman Halperin Savage, LLP
PositionVol. 62 Special COVID-19 Issue Pg. 3

An Introduction to the Business Calendar, the Business Recovery Program, and Virtual Hearings

Vol. 62 Special COVID-19 Issue Pg. 3

Rhode Island Bar Journal

May, 2020

Hon. Brian P. Stern Hon. Brian P. Stern Associate Justice Rhode Island Superior Court, Christopher J. Fragomeni, Esq. Christopher J. Fragomeni, Esq. Shechtman Halperin Savage, LLP

The Business Calendar and Its Origins

Specialized courts have existed within legal systems around the world. England, France, Germany, and Austria, for example, have operated commercial courts for decades.[1] The United States also created specialized federal courts, such as the Bankruptcy Court, Claims Court, Court of International Trade, and Ta x Court, just to name a few.[2]Some states have also created specialized courts; Delaware, for example, established the Delaware Chancery Court over two hundred years ago, which is an equity court of limited jurisdiction that has become known for its preeminence in business litigation.[3]

Despite the well-settled existence of specialized courts, “business courts” are relatively new to the judicial system. In the late 1980s and early 1990s, there were growing concerns about the efficiency, predictability, expertise, and knowledge of courts presiding over complex corporate and commercial disputes.[4] Consequently, a discussion emerged to create “business courts.”[5] Advocates insisted that business courts would provide a more efficient disposition of cases–removing the burden from other judges whose dockets oftentimes contained time-consuming, procedurally complex business disputes.[6] Ultimately, the New York State Unified Court System implemented one of the nation’s first business courts in 1993.[7] In its first year, New York’s newly formed commercial division experienced a thirty-five percent increase in disposition of matters.[8]

After 1993, business courts steadily grew in number around the nation.[9] Following that national trend, the Rhode Island Superior Court Business Calendar (“Business Calendar”) was created by an administrative order in 2001.[10] The Business Calendar’s implementation resulted from the “immense” amount of time that business matters stagnated before the Superior Court.[11] Its main purpose, as then-Presiding Justice Joseph F. Rogers, Jr. explained, was to establish an efficient “tracking and expeditious consideration of actions affecting jobs and businesses.”[12] Presiding Justice Rodgers further expressed his hope that “[w]ith early and frequent intervention by a judge,” some “businesses will not fail, will not close, and jobs won’t be lost.[13] Within its first eighteen months, under the leadership of Associate Justice Michael Silverstein (ret.), the Business Calendar’s efficient disposition of business matters proved a “resounding success.”[14] Thirty-eight percent of the cases on the Business Calendar were closed; an “extraordinarily fast” disposition rate.[15] Based upon the success of the Providence Business Calendar, in 2011, Presiding Justice Alice B. Gibney issued Administrative Order 2011-10, expanding the Business Calendar state-wide.[16]

Since its inception, the Business Calendar has provided businesses with an expeditious forum to litigate business or commercial disputes. Significantly, it provides a venue for a business to seek the appointment of a receiver for its orderly sale, wind down, or liquidation. In certain circumstances, justices presiding over the Business Calendar have appointed non-liquidating receivers allowing businesses to operate while reorganizing its affairs. The Business Calendar’s efficiency in adjudicating and administering these matters has directly affected local businesses and jobs. For instance, receivership proceedings, using a quickly initiated sale process, have resulted in new owners purchasing the business who then further invest in the business.[17] That investment results in the continuation of the business and the retention of jobs, benefiting the entire economy.[18]

COVID-19 Pandemic

The COVID-19 pandemic has spared no one: it has upended our daily lives, exacted a human toll, and brought uncertainty to our State’s economic outlook. The virus has had wide-ranging effects, causing, among other things, economic turmoil as a result of the stock market’s largest thirteen-day loss since May 1896.[19] On a local level, the State’s businesses have been blighted as a result of governmental orders that prohibit on-premises consumption of food or drink at restaurants and bars;[20] close non-critical retail businesses, close-contact businesses, and public recreation and entertainment establishments that conduct in-person activities;[21] impose quarantine restrictions on travelers;[22] and implement stay at home orders.[23] The economic impacts of the COVID-19 pandemic have caused numerous businesses, especially those in the hospitality industry, to voluntarily close in an attempt to stave off the economic losses of operation[24]Other businesses have performed extensive layoffs, resulting in 162,582 unemployment filings between March 9, 2020 and April 1 7, 2020.[25]

Rhode Island’s judiciary was no less immune to the pandemic’s effects. In an effort to contain the spread of COVID-19, the Rhode Island Supreme Court, through several executive orders, has continued all trial and non-essential matters, closed certain courthouses, and imposed limitations on staffing of courthouses that remained open only on a limited basis for emergency or essential matters.[26] As a result, unless it fit into certain exceptions, a business could not seek the sort of expeditious determination usually available on the Business Calendar.

Superior Court’s Response to COVID-19:

The Business Recovery Program and Virtual Hearings

The Superior Court has taken two major steps to combat the detrimental effects of the COVID-19 pandemic on the State’s businesses. First, recognizing the devastating financial impact that the virus has inflicted upon businesses, the Superior Court created the COVID-19 Business Recovery Plan, a non-liquidating receivership program administered by the Business Calendar[27] Designed to further the original purposes of the Business Calendar–the preservation of economic investment and jobs in the State[28]–the program permits eligible businesses to continue operations under supervised protections of the Court[29] Such protection includes a Court-ordered injunction against lawsuits and collection efforts. While in the program, a business and its assets remain intact and the business may continue to operate pursuant to a Court-approved business plan, under the supervision of a non-liquidating receiver[30] The goal is to offer eligible businesses a moment to breathe, after which, the business will hopefully address its debts, have the time to take advantage of federal and state loan and grant programs, and begin generating revenues again.

Second, at the outset of the pandemic, the Rhode Island Supreme Court procured, and the Superior Court implemented, a remote video conferencing system to address the lack of immediate access to the Business Calendar and its expeditious resolution process.[31] The Presiding Justice authorized the Business Calendar to conduct certain conferences remotely. Initially, the Business...

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