By Hon. Paul W. Bonapfel (U.S. Bankruptcy Judge, N.D. Ga.)
A Guide to the Small Business Reorganization Act of 2019 is a comprehensive explanation of the new subchapter V of chapter 11 of the Bankruptcy Code that qualifying debtors may elect and other changes to the Bankruptcy Code that the Small Business Reorganization Act of 2019 (“SBRA”) enacted. The Guide also covers related changes to title 28 of the U.S. Code (Judiciary and Judicial Procedure) and the promulgation of Interim Bankruptcy Rules and revised Official Forms.
Among other things, the Guide discusses the new definition for ”small business debtor;” the role and duties of a subchapter V trustee; changes in procedures; provisions for the content and confirmation of a subchapter V plan (including elimination of the “absolute priority rule”); and new provisions for discharge after confirmation of a “cramdown” plan.
Since the distribution of earlier versions of the Guide prior to SBRA’s effective date (February 19, 2020) and its publication at 93 Amer. Bankr. L. J. 571, the paper has been revised and updated to include discussion of: the increase in the debt limits for eligibility for subchapter V under the CARES Act; how courts are implementing procedures for subchapter V cases; and early case law dealing with retroactive application of subchapter V, its availability in a chapter 11 case filed prior to its enactment, and the exception in new § 1190(3) to the antimodification rule in § 1123(b)(5), which prohibits the modification of a claim secured only by the debtor’s principal residence.
The latest Guide is available here. (Revised July 2020 to include Summary Comparison of U.S. Bankruptcy Code Chapter 11, 12, & 13, Key Events in the Timeline of Subchapter V Cases, and additional sources and discussion; supplemental materials added November 2020 in Chapter XIV.)