In August 2019, Congress passed the Small Business Reorganization Act (SBRA), which added Sub-Chapter V to Chapter 11. In 2021, the law was amended to increasing the debt limit to 7.5 million in liabilities for Subchapter V. The goal of the new Small Business Chapter 11 is to reduce costs, increase court access, and provide quicker relief to small business debtors. This is achieved with requirements for promptly proposing a Chapter 11 Plan of Reorganization, working with a specially-appointed Chapter 11 trustee, and eliminating certain fees that are paid quarterly in a traditional Chapter 11 case. A typical Subchapter V will emerge from Chapter 11 within one year.
If you are a business owner struggling with debt, speak with our attorneys to see if Chapter 11 is a viable option for your business.