If you need a Subchapter 5 Bankruptcy attorney throughout Metropolitan New York and Maryland in response to the current coronavirus pandemic and its devastating effect on many small businesses, The Lauterbach Law Firm is here to help. Subchapter 5 is a new and innovative form of bankruptcy designed to help small businesses. Our firm offers a free virtual consultation to see if we can help your business reorganize under Subchapter 5 in order to both survive and thrive.
In February 2019 Congress enacted the Small Business Reorganization Act (SBRA), which added a new Subchapter 5 to the Chapter 11 of the United States Bankruptcy Code. The goal of Subchapter 5 is to help small business owners reorganize in a more expeditious and less costly manner. Contact us to learn more about how we can help you.
Originally limited to businesses with $2.7M in total secured and unsecured debt, the Coronavirus Aid, Relief and Economic Security Act (“CARES ACT) enacted in March 2020 allows for businesses with total debt up to $7.5M to qualify for Subchapter 5 in order to meet the needs of small businesses during these economically challenging times. Small businesses are required to show that at least half of their pre-petition debts arose from commercial business activities. Additionally, only businesses defined as “single asset real estate,” meaning they derive substantially all income from the operation of a single piece of real estate, do not qualify.
Subchapter 5 is a streamlined form of Chapter 11 of the Bankruptcy Code. It is initiated by filing a Chapter 11 petition and electing Subchapter 5. The small business debtor then files documents with the court, including a recent balance sheet and statement of operations. A plan of reorganization must be filed within 90 days from the date of filing the petition. A Subchapter 5 U.S. trustee is appointed to oversee the small business debtor’s plan of reorganization.
Subchapter 5 offers a more efficient and economical vehicle to negotiate a Plan of Reorganization with your creditors, including:
At the Lauterbach Law Firm we’ll review your company’s business and specific issues it is encountering to determine if Subchapter 5 is a viable vehicle to help your business survive. Our experienced bankruptcy attorneys will guide you through the entire process from filing to confirmation of a Subchapter 5 Plan in order to emerge as a leaner and more successful business.
We know how important your business is to you, and we are equipped to assist you through every step of the Subchapter 5 bankruptcy process. Contact The Lauterbach Law Firm today to learn more about what we can do for you.