Amidst the current health crisis, many small businesses are struggling to keep their organizations afloat. If your small business has been affected by the current economic downturn and you fear that if you file for bankruptcy, you will lose your business, you have options. The Small Business Reorganization Act of 2019 is an innovative effort to help small businesses who are dealing with financial issues. Our Fort Lauderdale bankruptcy lawyers explain what the Small Businesses Reorganization Act is and how it can benefit your small business.
If your small business is having financial difficulties, you have options. Reach out to our Fort Lauderdale bankruptcy attorneys today at (954) 280-5066 to schedule a virtual consultation!
What Is the Small Business Reorganization Act?
The Small Business Reorganization Act (SBRA) helps small business debtors reorganize their debts and save their businesses. The SBRA expedites the entire Chapter 11 Bankruptcy process and reduces the costs for small businesses. To qualify for SBRA, small business debtors must have less than $7.5 million in debts. Small businesses must also select to proceed under a new subchapter V of Chapter 11 Bankruptcy.
Chapter 11 Bankruptcy allows businesses to continue operating while they restructure their finances and negotiate payment plans with creditors. However, only large companies had the resources to benefit from Chapter 11 Bankruptcy. Chapter 11 is one of the most expensive and complex debt-relief options, so small businesses weren’t able to take advantage of it like they are now. With the Small Business Reorganization Act, small business debtors can take advantage of Chapter 11 Bankruptcy like never before.
What Are the Benefits of the Small Business Reorganization Act?
The Small Business Reorganization Act will benefit many small business debtors who are struggling to pay off their debts. The subchapter V of Chapter 11 Bankruptcy has shorter deadlines for completing the bankruptcy process and allows businesses to have greater flexibility negotiating payment plans with creditors. Our team at Leiderman Shelomith Alexander + Somodevilla, PLLC can help you facilitate the development of a reorganization plan that works for you.
Below are some of the benefits of the Small Business Reorganization Act:
- Appointment of a trustee: The SBRA provides small businesses with a trustee who can facilitate the small business debtor’s reorganization and monitor the reorganization plan.
- Delayed payment of administrative expense claims: The act also removes the requirement for small businesses to pay administrative expense claims at confirmation.
- Discharge benefits: In some cases, the court may grant the debtor a discharge before completing all payments.
- Elimination of new value rule: The act removed the requirement that equity holders of small business debtors provide “new value” to retain their equity interest without paying creditors in full. The act only requires that the plan be fair and equitable.
- Modification of certain residential mortgages: The SBRA also removes the categorical prohibition against individual debtors modifying their residential mortgages, as long as the underlying loan was not used to acquire the residence.
- Streamlining the reorganization process: One of the most significant benefits of the SBRA is that it simplifies the reorganization process. Debtors no longer have to obtain approval of a separate disclosure statement or obtain required votes to confirm a plan. The act only requires the debtor to file its plan within 90 days of the bankruptcy filing, among other requirements.
Call Our Miami Chapter 11 Bankruptcy Attorneys: (954) 280-5066!
If your small business is facing economic difficulties, you need an experienced attorney to help you find the best solution for you and your organization. With over eight decades of collective experience, the Fort Lauderdale bankruptcy lawyers at Leiderman Shelomith Alexander + Somodevilla, PLLC have developed invaluable insight into the bankruptcy process. We have helped business professionals throughout South Florida obtain the guidance they need to help them keep their businesses moving forward. When you hire our team, you can rest assured that we will use our knowledge, skills, and experience to help you attain the debt-relief you need.
In light of the current health crisis, our team is offering consultations via video chat or phone. Contact us at (954) 280-5066 to set up an appointment today!