Initial Office Meeting Checklist

Are you a small business owner who needs help saving your business?

In August 2019, effective in February 2020, Congress enacted SBRA in response to complaints the 2005 Chapter 11 was too cumbersome (and expensive) for small businesses. Unfortunately, only businesses with less than 2.726 million of debt were eligible. The virus-driven CARES Act later raised the cap (temporarily) to 7.5 million. The SBRA provides that so long as secured creditors receive the value of their collateral (over time), and the debtor pays all of its discretionary income (after operating expenses) to unsecured creditors for 3-5 years, the debtor (individual or corporate) can retain ownership of the business. Some features:

A “SBRA Trustee” is appointed to help (but not replace) debtor’s management;
A Plan with Disclosure Statement is to be proposed in the first 90 days;
Creditors can’t propose a Plan or vote on debtor’s Plan of Reorganization;
The “absolute priority rule” is eliminated (it required owners paying creditors in full or injecting new capital to retain ownership); and
Certain burdensome admin reporting and financial requirements were relaxed or eliminated.

The SBRA was negotiated and enacted before the COVID-19 pandemic. In its wake, corporations urged Congress to raise the debt ceiling to 10 million. In response, the CARES Act increased the debt limit to 7.5 million for cases filed before March 27, 2021. After this deadline the cap reverts to 2.726 million. Temporary, but disabling, reductions of cash flow are impairing otherwise viable businesses. SBRA/CARES provide an opportunity for struggling business debtors to discount and stretch out repayment of suspended landlord, vendor, and other similar payment-deferred obligations. If the foregoing debt restructuring provisions (the crisis “vaccine”) seem helpful, and/or necessary, management should contact reorganization attorney Jon Clarke for further details and discussion.

Initial Office Meeting Checklistwebadmin2022-09-20T12:42:05-07:00

This initial office meeting checklist provides an overview of what to do to prepare for a meeting with Denver bankruptcy lawyer Jon B. Clarke.

This initial office meeting checklist provides an overview of what to do to prepare for a meeting with Denver bankruptcy lawyer Jon B. Clarke.

At the Initial Office Consultation, we commence analysis of numerous documents detailing the client’s asset, debt, income, expense and past financial transactions. The 2005 Act requires us to do this before we can give any meaningful legal advice to the client.

Prior to the date set for the Initial Office Consultation, please assemble and organize as many of the below documents as possible. These are the most important ones and bringing them with you to the IOC will enable us to properly analyze your need for debt relief. The 2005 Act requires completion of some additional asset, debt, and past transaction forms which we will furnish at the IOC. The documents are as follows:

A recent credit report, preferably Experian, Equifax, or TransUnion for each individual debtor.
All statements, bills, notices, letters received from creditors and collectors in the last three months — comprising all your debts including credit cards, medical bills, lawsuits, mortgage loans, personal loans, car loans, furniture loans, jewelry loans, etc.
For business debtors, the business-entity balance sheet plus income & expense summary for the prior year ending and the latest month of the current year. (individual & business)
A check or cash for the IOC minimum ($2500) or other agreed amount.

Statewide clientele but with emphasis on the Front Range communities of Greenwood Village, Boulder, Aurora, Centennial, Lakewood, Englewood, Avada, Westminster, Broomfield, Thornton, Golden, Littleton, Castle Rock, Monument, Castle Rock, Highlands Ranch, Aurora, Parker, Centennial and Pueblo as well as other cities throughout Arapahoe County, Boulder County, Douglas County, City & County of Denver, Elbert County and Jefferson County.