Brian Shaw and Christina Sanfelippo discuss the Small Business Reorganization Act (SBRA) that went into effect on February 19, 2021 and is designed to improve the Chapter 11 reorganization process for small business debtors in Law360. Many small businesses are turning to the SBRA as an alternative to Chapter 11 because of its reputation of being an easier, more cost effective approach to restructuring. According to Brian and Christina, a growing number of individual guarantors of businesses are turning to the SBRA in large part because of the creditors’ committee and competing plans of reorganization. The article addresses who qualifies as engaged within the Bankruptcy Code’s new definition of small business debtor as well as the majority and minority views on whether a debtor must be engaged to apply for the SBRA.
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