Bankruptcy Code’s Small Business Reorganization Act Debt Limit is Increased to $7,500,000 for One Year, by the CARES Act that is part of US Legislation to Combat the Covid 19 Pandemic
In February 2020, the Small Business Reorganization Act of 2019 (“SBRA”), also known as Subchapter V of Chapter 11 of the Bankruptcy Code, went into effect. The SBRA includes a number of provisions that make Chapter 11 reorganization quicker, cheaper and more effective for businesses with total debts under $2,725,625. The recently enacted CARES Act, designed to aid businesses suffering the effects of the coronavirus, increases the debt limit to $7,500,000 for one year, which will enable a far greater number of companies to take advantage of the SBRA