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ABI Subchapter V Task Force Final Report Provides Key Recommendations to Bolster the Ability of Small Businesses to Reorganize Under Subchapter V of the Bankruptcy Code
The ABI Subchapter V Task Force unveiled its final report of recommendations, revealing that subchapter V of chapter 11 of the U.S. Bankruptcy Code is achieving its objective of helping more small businesses reorganize efficiently in bankruptcy while also offering best practices and potential statutory amendments for policymakers, judges and practitioners to consider. The key recommendation highlighted by the Task Force’s Final Report was the support for permanently maintaining the filing eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V.
To download the Final Report, please visit https://subvtaskforce.abi.org/.
The Small Business Reorganization Act of 2019 (SBRA) went into effect on February 19, 2020, with a debt-eligibility limit of $2,725,625 for struggling small businesses looking for a more economical and efficient way to reorganize their debts within chapter 11 of the Bankruptcy Code. In March 2020, the eligibility limit was expanded to $7.5 million through the CARES Act of 2020, and it received subsequent legislative extensions that are scheduled to sunset in June 2024.
The Task Force was created in April 2023 with a nine-member expert panel comprised of judges, practitioners, trustees and academics that examined case law and statistical data under subchapter V since its enactment through the present. The Task Force’s Final Report is the result of nine months of public hearings, roundtable discussions and an industry survey inviting comment on subchapter V.
Key recommendations in the Final Report centered on the following subchapter V issues:
· Eligibility
· The Role of the Subchapter V Trustee
· Case Administration
· Plan and Confirmation Issues
· Post-Confirmation Administrative Matters
To download a copy of the full report, please click here.
The Task Force is grateful for the financial support it received from ABI’s Anthony H.N. Schelling Endowment Fund.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.