Maxim_Kazmin – stock.adobe.com An Atypical Small Business Subchapter V Matter
A look at the Subchapter V bankruptcy case of a health plan trust—not your typical "small business" reorganization.
February 17, 2022 at 10:00 AM
9 minute read
Bankruptcy
The Small Business Reorganization Act of 2019 (SBRA) represents a significant change to the Chapter 11 process. The most notorious of those modifications includes eliminating the U.S. Trustee's routine of appointing a creditors' committee unless the court orders otherwise "for cause"; providing for the appointment of a Subchapter V trustee; and eliminating quarterly U.S. Trustee fees. The SBRA was enacted to provide the colloquial "Main Street" debtors with a more manageable and cost-effective option to the restructuring of their debts or liquidation of their assets than the standard Chapter 11 (the "Standard 11"). There are differing opinions on the availability of Subchapter V for a liquidating debtor. However, it is worth noting that, in New Jersey, the Bankruptcy Court's mandatory form for a Subchapter V plan is titled, "Chapter 11 Subchapter V Small Business Debtor's Plan of Reorganization [or Liquidation]."
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