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Sen. Chuck Grassley (R-Iowa) and Sen. Sheldon Whitehouse (D-R.I.) yesterday unveiled legislation that could make the chapter 11 bankruptcy process cheaper and faster for companies that file for protection with about $2.5 million or less in debt, the WSJ Pro Bankruptcy reported. The "Small Business Reorganization Act of 2018" creates a new voluntary process with incentives for owners who want to keep ownership stakes and protections for creditors who want to be repaid quickly and reliably. The process applies to companies that file for chapter 11 protection with about $2.5 million of debt or less. The bill could cut the cost of bankruptcy by requiring companies to file a repayment plan within 90 days and eliminating half of the two-step process for judges to approve that plan. The quick deadline is meant to get money into the hands of creditors faster and under supervision by a new court-appointed financial professional. Federal lawmakers have tried twice before to make it easier for small businesses to survive using bankruptcy, but bankruptcy experts said neither effort was successful. A 2014 report from ABI's Chapter 11 Reform Commission found “significant and troubling issues” for small and middle-market companies. The legislation would also cut costs by eliminating the automatic appointment of an unsecured creditors committee, an oversight group that typically pressures company executives to get their firm out of bankruptcy quickly and put forth the most money possible toward repayment. Read more.

Click here to read the bill text.

Click here to read Sen. Grassley’s press release. 

Click here to read Chapter 11 Reform Commission Co-Chair Bob Keach’s statements on the introduction of the legislation. 

Small businesses around the country say that they are bracing for the latest round of tariffs, which could cut into already-thin profits and leave them with little recourse but to pass on additional costs to consumers beginning this holiday season, the Washington Post reported. And while larger retailers such as Walmart, JC Penney and Amazon say they have already locked in low-priced inventory for the holidays, independent retailers tend to rely on third-party suppliers to import products for them, giving them little control over where their goods come from, or how much they cost. “Larger retailers may be able to find alternative sources or be able to absorb a price increase without passing the cost on to their customers,” said David French, senior vice president of government relations for the National Retail Federation. "But the smaller you are, the more vulnerable you are to the impact.” Analysts say the tariffs — which begin Monday at 10 percent and will rise to 25 percent on Jan. 1 — are likely to trickle down to retailers and consumers in the coming weeks and months, raising the prices of everyday household goods. Read more. 

In related news, U.S. Customs and Border Protection on Wednesday said that it had assessed $2.2 billion in tariffs on imported steel and $625.4 million on aluminum, as well as $1.2 billion in duties on Chinese imports, Bloomberg News reported. The amount represents additional federal income from levies imposed on foreign imports of the metals and Chinese products this year. Actual collections and deposits into the U.S. Treasury may be lower because importers and companies can file for refunds, returns and drawbacks, a process that can take as long as six months, the agency said. Read more. 

Nearly a year after Hurricane Maria devastated Puerto Rico, many of the island’s roughly 44,000 small businesses that haven’t benefited from reconstruction spending are still struggling, Bloomberg News reported. About 2,400 businesses closed in the fourth quarter of 2017, more than double the amount that closed during the same period in 2016, U.S. Bureau of Labor Statistics data show. In total, 5,000 to 8,000 small businesses may have closed permanently since the storm, estimates Nelson Ramírez, president of the Centro Unido de Detallistas, a small business advocacy group in San Juan. The toll could climb to more than 10,000, he says, if insurers keep dragging their feet, energy costs keep increasing, and large numbers of Puerto Ricans keep relocating to the mainland. Because small employers represent about 80 percent of the private sector workforce, their health is crucial to the economy.