Small Business Reorganization Act (SBRA) and Subchapter V
The new Subchapter V of Chapter 11 is open to small businesses with under $7.5 Million in debt. Small Business Reorganization Act (SBRA) was passed in August 2019. The Small Business Reorganization Act shifts leverage in favor of the business owner in several key areas.
1) Under SBRA / Subchapter V, a business owner can confirm a plan of reorganization without the consent of any creditor.
2) Only the business owner (debtor) has the right to modify the restructuring plan post confirmation.
3) A small business owner has relief from the absolute priority rule.
4) SBRA / Subchapter V is significantly cheaper and faster, with fewer hurdles and fewer fees.
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