Business Bankruptcy Resource Links

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.

Business Bankruptcy Resource Linkswebadmin2020-03-24T17:17:10-07:00

Useful Bankruptcy Resource Links

These business bankruptcy resource links provide info regarding the bankruptcy process. For more info, contact Denver bankruptcy attorney Jon B. Clarke.

These business bankruptcy resource links provide info regarding the bankruptcy process. For more info, contact Denver bankruptcy attorney Jon B. Clarke.

Legal Information Institute
This page, maintained by the Cornell University Law School, provides general information about bankruptcy.

American Bankruptcy Institute
The ABI is a multi-disciplinary, nonpartisan organization dedicated to research and education on issues related to bankruptcy and insolvency. This site contains general information, news and various other online resources.

American Bar Association
Information about Chapter 13 provided by the American Bar Association.

BankruptcyData.Com
This website provides both free and subscriber-only information about business bankruptcy.

U.S. Securities and Exchange Commission
Information about corporate bankruptcy provided by the U.S. Securities and Exchange Commission.

United States Bankruptcy Courts
The U.S. Bankruptcy Courts website provides bankruptcy information, forms and resources.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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