Until recently, small-business owners in financial distress found it difficult, if not impossible, to seek bankruptcy protection, according to a commentary in Crain's Cleveland Business. The ability to seek relief from adverse creditor action and successfully reorganize their businesses was hampered by the costly and onerous requirements that characterized a traditional reorganization under chapter 11 of the Bankruptcy Code. The Small Business Reorganization Act of 2019 (SBRA) was enacted to address this dilemma. Signed into law by President Donald Trump in August 2019 as a subchapter to Chapter 11, the new act takes effect this month, providing welcome relief for thousands of small businesses that may have otherwise had to close their doors as a result of overwhelming debt. The SBRA is intended to provide a framework to streamline the reorganization of a small business, thereby expediting the reorganization process, reducing associated costs and removing traditional barriers that could limit a company's ability to successfully emerge from bankruptcy. Click here to read the full commentary. Read more.
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