The Small Business Reorganization Act: How it started and where it’s going

The 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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