Subchapter V Bankruptcy
Our Las Vegas Bankruptcy Attorneys Are Here for Small Businesses
The Small Business Reorganization Act of 2019 (SBRA) was signed into law and added Subchapter V to Chapter 11 of the Bankruptcy Code. The SBRA allows small businesses to operate and restructure under a modified form of Chapter 11 and is designed to make bankruptcy reorganization more accessible. Subchapter V aims to help qualified small businesses achieve successful reorganization by relaxing the complexity and administrative burdens, reducing some of the costs, and streamlining the process of a traditional Chapter 11.
If you are a small business in Las Vegas considering filing for bankruptcy, our law firm is here to help. Fox, Imes & Crosby is driven to help clients dealing with difficult financial situations, and we are highly experienced in small business bankruptcy filings. When you need help understanding your options, we are just a phone call away.
How Subchapter V Filings Are Different
The SBRA makes several modifications to Chapter 11 that are intended to make it easier for small businesses to complete their restructuring plans quickly and efficiently. For example, it requires that a Subchapter V trustee be appointed at the beginning of every case; this trustee’s main responsibility is to facilitate the development of a consensual reorganization plan with creditors. This is quite different from the role of the creditor’s committee usually formed in a Chapter 11 filing.
Furthermore, it removes certain procedural hurdles that can delay confirmation of the reorganization plan, such as the absolute priority rule or “cram down” provisions found in traditional Chapter 11 cases. Finally, it imposes shorter timelines for plan confirmation hearings so that cases can move through the system more quickly than under conventional Chapter 11 proceedings.
These are just a few examples of how Subchapter V has modified the bankruptcy filing process for eligible small businesses. Please speak with one of our attorneys to learn more.
Can Creditors Contest a Subchapter V Filing?
Although creditors have the right to contest filings, most do not wish to derail these proceedings but want reassurance that the process is being overseen properly. However, due to the relatively new nature of Subchapter V proceedings, we are starting to see some creditors contesting debtors' eligibility. This can be a scary prospect and can slow down the bankruptcy process and cost you extensively in legal fees.
If you are in the process of filing under Subchapter V, and a creditor contests your eligibility, it is important to seek the help of an experienced attorney like ours in Las Vegas.
How Can Experienced Counsel Help?
Working with experienced counsel is important when navigating Subchapter V proceedings. A skilled lawyer can use their knowledge and resources to help ensure that all required steps are taken correctly. They can also provide guidance aimed at helping debtors to maximize their chances of successfully confirming a reorganization plan while minimizing any unnecessary expenses related to legal fees or trustee costs.
By working with knowledgeable legal counsel, you can reap the following benefits:
- Detailed knowledge of the SBRA and how it works
- Extensive insight into all your bankruptcy filing options
- Personalized guidance that can help you avoid costly mistakes when filing
- Accurate, dedicated representation when negotiating with creditors or when appearing in court
Is a Subchapter V Filing the Right Move for You?
The Small Business Reorganization Act has made it easier for qualified small businesses to get relief from debt under Chapter 11 bankruptcy proceedings. This law has opened up new possibilities for struggling small businesses seeking relief from debt obligations without resorting to liquidation or other drastic measures not typically available to them.
A debtor eligible for a Subchapter V filing may elect to go through this route at the time of filing. However, it is always recommended that they consult with an experienced attorney, like ours at Fox, Imes & Crosby, LLC to ensure this is the most beneficial option for their situation. Even though Subchapter V has streamlined the bankruptcy process for small businesses, it is still a complex legal proceeding that will have a lasting, long-term impact on you and your business.
If you own a small business in Las Vegas and are struggling with debt, filing for bankruptcy under Subchapter V may be a good option. Call Fox, Imes & Crosby, LLC to discuss your case with one of our experienced attorneys.
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