Implementation of Subchapter V of Chapter 11
Under the Small Business Reorganization Act of 2019 (SBRA)
On February 19, 2020, the Small Business Reorganization Act of 2019 (SBRA) took effect.
The SBRA creates a new subchapter V under chapter 11 for the reorganization of small business debtors. It does not repeal existing chapter 11 provisions regarding small business debtors, but instead creates an alternative procedure that small business debtors may elect to use.
The Committee on Rules of Practice and Procedure of the Judicial Conference of the United States has promulgated Interim Rules and Form Amendments to the Federal Rules of Bankruptcy Procedure as a result of the passage of the Small Business Reorganization Act. The Interim Bankruptcy Rules were adopted in this Court under Administrative Order 2020-02 “In re: Adoption of Interim SBRA Bankruptcy Rules”. [See also Administrative Order 2022-06 Adopting Revised Interim Bankruptcy Rule 1020]
The United States Courts and the Federal Judicial Center have made available SBRA educational resources to the public, including the following: https://www.fjc.gov/publications/small-business-reorganization-act (Federal Judicial Center website with online video of panel discussion on SBRA moderated by Judge A. Thomas Small (Ret.) (Bankr. E.D.N.C.) and the following downloadable files: 1) Small Business Reorganization Act of 2019 (Legislation), 2) Revised Testimony of A. Thomas Small on Behalf of the National Bankruptcy Conference, and 3) Legislative History.
The UPDATED “Guide to the Small Business Reorganization Act of 2019” as revised June 2022 by U.S. Bankruptcy Judge Paul W. Bonapfel Northern District of Georgia is available at the following link: [click here]
See additional Resources posted on the USCOURTS.GOV website:
Interim Bankruptcy Rule Changes Required by the Small Business Reorganization Act of 2019
Interim Bankruptcy Rules 1007, 1020, 2009, 2012, 2015, 3010, 3011, 3014, 3016, 3017.1, 3017.2 (new), 3018, and 3019
- Redline of SBRA Rules with Committee Notes (pdf)
- Clean version of SBRA Rules (pdf)
- December 5, 2019 Bankruptcy Rules Advisory Committee Report (SBRA Amendments) (pdf)
- Interim Rule 1020 with BTATC Act changes (pdf)
NOTE: The Bankruptcy Threshold and Technical Corrections Act (the BTATC Act), Pub. L. 117-151 reinstates the total debt limit for determining eligibility of a debtor to proceed under subchapter V of chapter 11 to $7,500,000 – the amount previously in effect under the CARES Act. Interim Rule 1020 was revised to implement the CARES Act debt limit from March 27, 2020 to March 27, 2022, when the relevant CARES Act provisions expired. The BTATC Act restores the $7,500,000 limit retroactively for cases commenced on or after March 27, 2020 through June 21, 2024 (two years after the date of enactment of the BTATC Act), and Interim Rule 1020 is amended accordingly. The Advisory Committee on Bankruptcy Rules recommends that courts adopt Interim Rule 1020 as a local rule while the BTATC Act subchapter V limit is in effect.