Small businesses with big financial problems

Two recent changes to the U.S. Bankruptcy Code are helpful to small business debtors needing to restructure due to the financial fallout from the pandemic.

The Small Business Reorganization Act of 2019 (“SBRA”), effective February 19, 2020, enables small businesses, either with secured and unsecured debts of $2,725,625.00 or less, to progress through Chapter 11 faster and cheaper than in the past. In response to COVID-19, Congress raised the debt limit to qualify for SBRA for one year to $7.5 million, allowing more debtors to avail themselves of SBRA benefits to get the relief they need during this time.

– Christensen Law Group, Clay Christensen