We spent the last part of February blogging about the first series of substantive opinions under the Small Business Reorganization Act of 2019 (SBRA), which became effective on February 19, 2020. That news seems rather quaint a month later, as the world, and now the U.S., is in the throes of the COVID-19 pandemic. Yesterday, those worlds collided for me when my client in the Northern District of Georgia, a Subchapter V debtor, let me know that he had to shut down both of his business locations in response to Gov. Kemp’s COVID-19 order. And this morning, we all woke-up to news that Congress was close to passing a $2 trillion coronavirus stimulus bill, potentially the largest emergency aid package in U.S. history.
Too busy to follow bankruptcy news today (as I, like most, struggled to work remotely), I didn’t learn until this evening, thanks to Rahman Connelly (a restructuring attorney at Morrison & Foerster) on Twitter, that the proposed stimulus bill contains a few bankruptcy provisions, including a temporary one year increase in the SBRA debt limit from approximately $2.7 million to $7.5 million!
Here is a link to just the bankruptcy provisions in the Coronavirus Aid, Relief, and Economic Security Act: Bankruptcy Provisions. Unfortunately for at least one of our clients, the increase appears to only be effective for cases filed after the effective date of the Act (i.e., not to existing Sub Vcases), which is unfortunate if I’m reading it right.
We’ll keep an eye on this and replace the links as this develops and hopefully becomes final.
**Thanks to my friends at Small Herrin, LLP in Atlanta who also gave me a heads-up about this, and pointed me to what so-far appears to be the more recent proposal. I was looking at a 3/23 version.
If you’d like to stay on top of this and other important bankruptcy issues, then you can subscribe to Plan Proponent via email here.