How the SBRA can make it work
The Small Business Reorganization Act makes it cheaper, faster, and less complex to have a successful Chapter 11 process for businesses with fewer than $7.5 million in total liabilities. It also provides significant leverage to the company in dealing with creditors to restructure its balance sheet. The key features are:
Faster, less complex process
Significant leverage for debtor against unsecured creditors
The SBRA is new, only effective in February 2020. It is clear that Congress’ intention, as reflected in the Act, was to make Chapter 11 actually work for small businesses, allowing them to successfully reorganize as solvent, operating businesses.
To discuss whether it makes sense for your business to take advantage of the SBRA, contact us.