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  • Writer's pictureSarah Little

The Small Business Reorganization Act of 2019

On August 23, 2019 the Small Business Reorganization Act (“SBRA”) was signed into law. The SBRA becomes effective on February 19, 2020. The SBRA is found in Subchapter V of Chapter 11 of the Bankruptcy Code. The SBRA is for both individuals and business who are eligible to file under Subchapter V. Relief under Subchapter V is limited to businesses and individuals engaged in commercial and business activities having aggregate non-contingent liquidated secured and unsecured debt, excluding debts to affiliates or insiders, of not more than $2,725,625.00.

The SBRA is designed to be a more streamlined and cost-effective manner for eligible debtors to participate in a Chapter 11 case. The SBRA also substantial compresses many of the deadlines that exist in a traditional Chapter 11 or Small Business Case under the existing law. The new law affords debtors who qualify enhanced powers to protect assets and discharge debts. There are numerous additional differences that are too numerous for the scope of this note. The attorneys of Kornfield, Nyberg, Bendes, Kuhner & Little, P.C. are available to consult and answer questions regarding this new provision of the bankruptcy code.

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