Robert W. Dremluk from our New York office recently authored an article for New York Law Journal that discusses the benefits of Subchapter V of the Small Business Reorganization Act of 2019 that provides small businesses with a realistic chance to restructure debt and reorganize their business.
Here are a few excerpts from the article:
On Aug. 23, 2019, the Small Business Reorganization Act of 2019 (SBRA) was signed into law and created a new Subchapter V. The general purpose of
Subchapter V was to streamline the Chapter 11 bankruptcy process for small businesses and individuals engaged in business to administer their bankruptcy estate in an efficient and less costly manner.
The debt ceiling for a small business to file under Subchapter V was recently increased temporarily to $7.5 million under the Coronavirus Aid, Relief and Economic Security act of 2020 (the CARES Act). This debt ceiling increase expands access to bankruptcy relief to thousands of small businesses.
However, there is a remarkable irony between the laudable purpose of this legislation to help small businesses navigate efficiently through bankruptcy and its execution in the COVID-19 environment. One fly in the ointment is whether small business debtors can use PPP loans in bankruptcy.
Read their entire article HERE to learn more about the The Small Business Reorganization Act of 2019, Subchapter V.
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The foregoing content is for informational purposes only and should not be relied upon as legal advice. Federal, state, and local laws can change rapidly and, therefore, this content may become obsolete or outdated. Please consult with an attorney of your choice to ensure you obtain the most current and accurate counsel about your particular situation.