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Can the SBRA Provide a Lifeline to Small Businesses Suffering Due to COVID-19?

Can the SBRA Provide a Lifeline to Small Businesses Suffering Due to COVID-19?

Author: Joel R. GlucksmanDate: May 26, 2020

The Small Business Reorganization Act (SBRA), which seeks to make small business bankruptcies faster and less expensive, took effect in February. While the law preceded the coronavirus (COVID-19) pandemic, it is providing welcome relief to businesses impacted by the economic fallout of the ongoing pandemic.

The goal of a Chapter 11 bankruptcy is to help a financially-distressed business restructure its debts and survive as a going concern. During the bankruptcy, the business establishes a court-approved bankruptcy plan to satisfy its financial obligations over time.  If approved by both the creditors and the court, the business emerges from bankruptcy and can continue its operations.

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