On August 23, 2019, President Donald Trump signed into law the Small Business Reorganization Act of 2019 (SBR Act), which became effective last month. On March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 global pandemic. New subchapter V under chapter 11 of the US Bankruptcy Code eliminates some of the more costly elements of traditional chapter 11 relief, such as disclosure statements, and in some ways is modeled after expedited procedures used in chapter 12 and 13 cases. Subchapter V was designed to promote simplicity and efficiency for reorganization of small-business debtors. The CARES Act temporarily raises the eligibility debt ceiling from $2,725,625 to $7,500,000 for new cases filed between March 28, 2020, and March 27, 2021. A permanent change to the SBR Act made by the CARES Act is the elimination of eligibility to file for subchapter V relief for any affiliate of a public company.
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Continue Reading Temporary and Permanent Changes Made to the New Small Business Reorganization Act of 2019 as a Result of the Coronavirus Aid, Relief, and Economic Security Act Enacted March 27