The Small Business Reorganization Act of 2019 (SBRA) became effective on the eve of the economic free fall stemming from the COVID-19 pandemic. Longleaf Law Partner’s bankruptcy law expert, Cindy G. Oliver, explains the new law in our 13-part series, Bankruptcy Buzz.
Part 9 of 13:
The elimination of the disclosure statement, an often lengthy document providing adequate information to a holder of a claim or interest entitled to vote to accept or reject a Chapter 11 plan of reorganization, is a time and cost savings that hopefully trickles down to the creditors. However, the bankruptcy court can order a small business debtor to file a disclosure statement if warranted. To a certain extent, the contents of a traditional disclosure statement are folded into a Subchapter V small business plan of reorganization, which is required to include a brief history of the debtor’s business operations, a liquidation analysis, and projections of the feasibility of the plan. The confirmation process in the new small business Subchapter V is simplified and condensed with the filing of a stand-alone plan of reorganization.
The information provided in this article does not, and is not intended to, constitute legal advice. No action should be taken in any particular circumstance or fact situation with reliance upon the information contained in this article without obtaining the advice of an attorney.