Last week, the President signed into law the “Cares Act” which provides broad relief for individuals and businesses affected by the present situation.
One of the sections of the Cares Act made a change for a period of time to the new Subchapter V provisions (the Small Business Reorganization act) that was just signed into law in February, 2020. Subchapter V provides for a simplified procedure for small businesses to reorganize their affairs under a streamline version of Chapter 11. The Cares Act broadened the eligibility of business able to use Subchapter V by increasing the debt limitation from $2,725,000.00 to $7.5 million.
The streamlined procedures of Subchapter V include:
shorter time frame to plan approval
no need for a disclosure statement
generally no creditors’ committee appointed
Subchapter V trustee appointed to assist the debtor
owner generally allowed to retain ownership without providing new value
By jbublick|2020-10-19T10:12:37-04:00April 2nd, 2020|Uncategorized|Comments Off on New COVID-19 Small Business Bankruptcy Relief