The pandemic changed everything – including Chapter 11 bankruptcies. The
Small Business Reorganization Act became effective in 2020. Do you know
the provisions of the Act or how to comply? What effect did the CARES Act
have? What are the practical implications for your financial institution from
this new, faster, debtor-friendly option? This timely webinar will cover it all!
- Distinguish between a regular Chapter 11 bankruptcy and a SBRA bankruptcy filing
under Subchapter V of Chapter 11
- Identify your institution’s rights under a traditional Chapter 11 and the SBRA
- Determine the appropriate steps when your borrower files a Chapter 11
bankruptcy – especially early on in the case
- Understand key elements and conditions of the debtor’s reorganization plan
- Challenge the debtor’s cramdown based on the collateral valuation and financial
The full financial impact of the global pandemic and subsequent recovery is still unknown.
Certain businesses will have no choice but to seek Chapter 11 bankruptcy protection. In
2020, the Small Business Reorganization Act (SBRA) became effective. SBRA’s reach was
expanded through the CARES Act to small business borrowers with debts of less than
$7,500,000. It’s a new fast-track, debtor-friendly bankruptcy option that alters creditors’
rights in Chapter 11 bankruptcy cases. 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 SBRA allows a debtor to
“cramdown” a non-consensual reorganization plan. Under 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 you need to know about Chapter 11 and SBRA, including related potential
pitfalls and traps.
Eric L. Johnson, JD, Spencer Fane LLP
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.