Can Corporate Bankruptcy Help Your Small Business? Expansion Of The Small Business Reorganization Act

Robins Kaplan LLP
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In the wake of the COVID-19 pandemic, the country’s small businesses have suffered systemic and catastrophic disruption to operations, demand and supply that will make it impossible for many such businesses to fulfill their obligations to creditors and to access financing for continued business operations. The recent enactment of the Small Business Reorganization Act (“SBRA”) of 2019, which created a new Subchapter V (“SubV”) as part of chapter 11 of title 11 of the United State Code (the “Bankruptcy Code”) both extends the eligibility requirements of the Chapter 11 process to more small businesses, as well as expands the leverage and options by which small businesses can restructure their financial obligations and rehabilitate the economic viability of their operations. This article examines the significant advantages afforded to small businesses under SubV.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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