Small Business Bankruptcy

Effective beginning in February 2020, new provisions were added to the Bankruptcy Code to make the chapter 11 process quicker and less expensive for small businesses, under the Small Business Reorganization Act of 2019 (SBRA).  Further changes were made in April 2020, to expand the number of companies that may qualify for SBRA rules.  The Act now applies to companies with no more than $7,500,000 of secured and unsecured debt.

Under SBRA, the small business chapter 11 process has been streamlined in order to make it quicker and less expensive for small businesses.  In addition, there are some important modifications in the requirements for approval of a reorganization plan, making it easier for a company to succeed in the chapter 11 process.

Like traditional chapter 11 rules for larger enterprises, SBRA creates opportunities for small businesses to reorganize and to re-emerge from bankruptcy to grow again, but with less requirements and expense.  As experienced bankruptcy counsel, Meyers Law Group, P.C. can help companies navigate SBRA, just as with the traditional chapter 11 process, in order to ensure the best outcome possible.

When Does a Small Business File for Bankruptcy? And 8 More Questions