The new Subchapter V bankruptcy alters creditors’ rights. For example, only
the debtor can file a reorganization plan. And debtors are allowed to “cram
down” a non-consensual reorganization plan. Learn more about this fasttrack,
debtor-friendly bankruptcy option known as the Small Business
Reorganization Act (SBRA).
- Distinguish between a regular Chapter 11 bankruptcy and a SBRA bankruptcy filing
under Subchapter V of Chapter 11
- Identify your institution’s rights under the SBRA
- Understand the terms of the debtor’s reorganization plan
- Determine the appropriate steps to take under the reorganization plan
- Challenge the debtor’s “cram down” based on the collateral valuation and financial
Bankruptcy filings are on the rise, and many business borrowers are opting to file under
the SBRA which became effective in February 2020. The CARES Act expanded the SBRA’s
coverage to small business borrowers with debts of less than $7,500,000. The SBRA is a
new fast-track, debtor-friendly bankruptcy option that alters creditors’ rights in Chapter
11 bankruptcy cases.
The SBRA is faster because debtors are not required to file the detailed statement required
in regular Chapter 11 cases. In addition, the SBRA reorganization plan must be filed
within 90 days of the bankruptcy filing while a regular Chapter 11 plan can take a year or
more. However, the most notable debtor-friendly characteristic is that the SBRA allows a
debtor to “cram down” a non-consensual reorganization plan. Under the SBRA, only the
debtor can file a reorganization plan, and the court can confirm a debtor’s plan without
the support of any class of claims as long as the plan is deemed to be fair and equitable.
This webinar will explain what your institution needs to know about SBRA Chapter 11
bankruptcy cases and how to handle them.
Elizabeth Fast & Eric L. Johnson, Spencer Fane LLP
Elizabeth Fast is a partner with Spencer Fane LLP where she specializes in the
representation of financial institutions. Elizabeth is the head of the firm’s training division.
She received her law degree from the University of Kansas and her undergraduate degree
from Pittsburg State University. In addition, she has a Master of Business Administration
degree and she is a Certified Public Accountant. Before joining Spencer Fane, she was
General Counsel, Senior Vice President, and Corporate Secretary of a $9 billion bank with
more than 130 branches, where she managed all legal, regulatory, and compliance
functions. She is a member of the Missouri State Banking Board by appointment of the
Eric Johnson is a partner at Spencer Fane LLP. He represents financial institutions in
bankruptcy, non-bankruptcy insolvency proceedings, such as receiverships and
foreclosure proceedings, out-of-court workouts and restructurings, and other insolvency
matters. An experienced litigator, Eric also represents clients in complex insolvency
related litigation, including bankruptcy avoidance actions and other adversarial or
contested matters. He is a member of the panel of Chapter 7 trustees for the Western
District of Missouri and has served as a federal equity receiver. He holds a bachelor’s from
the University of Northern Iowa and a JD from the University of Iowa College of Law.