With the recent signing of the Small Business Reorganization Act (SBRA) here are some additional items to be aware of:
A Small Business Trustee must be appointed (similar to Chapter 13 Trustee) and act as a protective channel for plan payments. This trustee has the authority to object and can operate the business if the debtor is removed as debtor-in-possession.
The timing has also been accelerated in this reorganization process. From the filing date (Day 1) the plan for the reorganization must be in place by Day 90. To-date the debtor has had up to 180 days to file their plan.
Some concerns are growing over the administrative fees that could come as a result of these changes, but there is a lot of dust left to let settle before the full results of these changes can be known.
Ultimately, this could bring about greater risk for Lenders and longer payment terms for related practices.
How does Capitol Lien relate to such legalese?
We provide helpful due diligence on the front-end to help mitigate these risks for our Legal and Lender clients in addition to providing the following helpful
Obtain a 10-year bankruptcy search on the given name in the jurisdiction requested.
Obtain a comprehensive listing of newly filed bankruptcy proceedings nationwide or for a targeted region if preferred. (various frequencies available)
Contact Us to learn more.
For further details about changes and how they may affect what you do please contact a legal professional. We’ll be here behind the scenes supporting what they do.
NOT INTENDED TO PROVIDE LEGAL, ACCOUNTING OR OTHER PROFESSIONAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.