ABI Journal: Congress Giveth and Congress Taketh Away: The “Retroactive” Availability of Subchapter V
Chapter 11 was not designed with small businesses in mind. As a result, small businesses have often struggled to successfully reorganize in chapter 11. To “streamline the process by which small business debtors reorganize and rehabilitate their financial affairs,” Congress enacted the Small Business Reorganization Act of 2019 (SBRA), which affords small businesses greater bankruptcy relief than before by creating a new section, subchapter V, which eliminates the more onerous aspects of a chapter 11 case for small businesses. But unlike the Coronavirus Aid, Relief and Economy Security (CARES) Act, which is also intended to expand the availability of chapter 11 to small businesses, the SBRA is silent on whether it applies retroactively to cases that were commenced before the SBRA took effect.
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