The Small Business Reorganization Act: How It Started. How It's Going. Where to Next?
By further expanding access to a streamlined Chapter 11 process, the SBRA will ensure that a wider array of debtors have the ability of reorganizing themselves, when Chapter 11 was previously too cost-prohibitive for such debtors.
January 11, 2021 at 11:35 AM
9 minute read
This article appeared in The Bankruptcy Strategist, featuring the strategies and techniques devised by the country's top bankruptcy lawyers and reports on innovative procedural techniques, legislative developments and recent judicial rulings — plus what they mean for you and your clients.
Small Business Reorganization Act of 2019 (SBRA), which took effect earlier this year, added a new Subchapter V to Chapter 11 of the Bankruptcy Code, intended to make Chapter 11 more affordable, efficient, and beneficial for small businesses (especially those whose owners might otherwise lose their equity in a traditional Chapter 11 case).
Just weeks after taking effect, the SBRA was amended by the CARES Act for one year, expanding Subchapter V eligibility to significantly more debtors by increasing the limitation on how much debt a business or induvial may owe to creditors and still qualify as a "small business debtor," under the Bankruptcy Code.
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