Many businesses simply could not afford the expense of the typical Chapter 11 bankruptcy as a reorganization option. This was a shame because these businesses had a strong chance of surviving and continuing to employ thousands of workers. The Small Business Reorganization Act (SBRA) helps those debtors who were caught between Chapter 11 and Chapter 13 with no viable options. SBRA is a new subsection referred to as Subsection V.
SBRA takes effect on February 19, 2020. The current debt limit for a small business debtor engaged in commercial or business activity filed under SBRA is $2,725,625. SBRA reduces many of the deadlines and stresses put on small businesses under a large Chapter 11. For example, SBRA provides that a small business debtor has the exclusive right to file a plan of reorganization and that there will be no competing plans. SBRA also eliminates creditors’ committees.
SBRA is a wonderful option for small businesses struggling with debt. As a Certified Bankruptcy Specialist, I can attest to the great need for the SBRA option. It is here and we are prepared to offer consultations to discuss the benefits SBRA may provide your business. Dealing with debt in an organized fashion can save your business a significant amount of money, prevent the loss of business assets, loss of good employees, and allow the business to pay debts through a plan of reorganization. Call my office for a FREE INITIAL CONSULTATION 760-884-4444.