Unanswered Questions: Small Business Reorganization Act of 2019

By: Donald L Swanson The Small Business Reorganization Act of 2019 passed into law on August 23, 2019, and it becomes effective 180 days thereafter—on February 19, 2020. The new law is also known as “Subchapter V,” because that’s how it’s formally designated and housed under Chapter 11 of the Bankruptcy Code (see photo above). In... Continue Reading →

A Strategy for Reorganizing Medium-Size Businesses With Too Much Debt For The Small Business Reorganization Act

By: Donald L Swanson Hypothetical: You are an owner and operator of a closely-held business that has been successful for many years. But recent financial reverses are jeopardizing its future. You’d like to reorganize the business and discharge a bunch of debt, under the Small Business Reorganization Act of 2019.  But you can’t because the business... Continue Reading →

Accuracy on Bankruptcy Schedules: A Challenge in Representing Family Businesses

By: Donald L. Swanson “I’m very proud of the fact that, in four decades of practicing law, I’ve had only one client go to federal prison for lying on these bankruptcy schedules.” —Yours truly, emphasizing to clients the importance of accuracy and full disclosure in preparing bankruptcy schedules. One of the great challenges in representing... Continue Reading →

Small Business Reorganization Act: A Great Law With A Major Flaw

By: Donald L Swanson The Small Business Reorganization Act of 2019 has the following discharge provisions: Plan confirmation “discharges the debtor from” specified debts (see § 1181(c), § 1192 & § 1141(d)(1)(A)); but The discharge takes effect only “after completion” of “all payments due within” the 3 to 5 years term of the plan (§ 1192).... Continue Reading →

Plan Confirmation Standards Under Small Business Reorganization Act of 2019

By Donald L. Swanson The Small Business Reorganization Act of 2019 is said to provide a “Chapter 12-type” reorganization opportunity for small businesses within Chapter 11. That comparison is apt. Here’s why: Chapter 12 came into existence, back in 1986, because farmers had difficulty getting plans of reorganization confirmed under Chapter 11; The Small Business Act... Continue Reading →

A CRO-Type Advisory Role for Family Businesses in Financial Stress

By: Donald L Swanson When large businesses are in financial trouble, their banks commonly require them to hire a CRO (a Chief Restructuring Officer) as a condition for extending loans. The CRO can do a variety of things. But one of the essentials is an advisory role: --Evaluate the financial troubles and recommend a course of... Continue Reading →

Trustee’s Role Includes Financial Adviser & Mediation: Small Business Reorganization Act of 2019

By Donald L. Swanson The Small Business Reorganization Act of 2019 became law on August 23, 2019.  But the date it takes effect is "180 days" later: on February 19, 2020. This new law helps small business reorganize under Chapter 11 in much the same way that farmers reorganize under Chapter 12 and consumers reorganize under... Continue Reading →

When “Small” is Still Too Big: The Small Business Reorganization Act

By Donald L. Swanson The Small Business Reorganization Act is now law! The House of Representatives passed it on July 25, 2019; The Senate passed it on August 1, 2019; and The President signed it on August 23, 2019. This Act is much-needed and long overdue. It provides Chapter 12-type relief for small businesses within Chapter... Continue Reading →

ABI Webinar: Three New Bankruptcy Laws Explained

By: Donald L. Swanson Three bankruptcy bills recently navigated the political morass in Washington D.C. and became law on August 23, 2019.  The three new laws are: Small Business Reorganization Act of 2019 (H.R. 3311) Family Farmer Relief Act of 2019 (H.R. 2336) HAVEN Act (H.R. 2938). On August 29, 2019, the American Bankruptcy Institute ("ABI")... Continue Reading →

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