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 6 of 13:
A small business debtor who elects to reorganize under the new Subchapter V of Chapter 11, is required to attend a status conference, as is the trustee appointed in the case, within 60 days of the bankruptcy case. The court may extend the date of the status conference beyond 60 days “if the need for an extension is attributable to circumstances for which the debtor should not justly be held accountable.” At least 14 days prior to the status conference, the small business debtor must file a report detailing the debtor’s efforts to attain a consensual plan of reorganization.
The status conference requirement should hopefully preview the possibility of success (or failure) of the debtor’s efforts to file a consensual plan within the first 90 days of the bankruptcy case and may forecast the hurdles that the debtor must overcome to get its plan of reorganization confirmed by the bankruptcy court. The 60-day conference should help keep small business debtors on the fast track to a confirmed plan.
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.
